If my client has a sister company that pd for one month of their Source Ded on their behalf, how do I record it in the company that they were being pd for so that their Payroll Liab acct for that month shows as pd. One side would have to be Due To
You would need to setup an Inter-Company account to track this. Are you the bookkeeper for both companies?
Yes I am the bookkeeper. I already have an Intercompany acct set up. What I want to know is how do I record this payment that the sister company did so that when I look at the o/s Payroll Liability Balance report it shows that month as being paid.
In the company that pd the Source Deduction I would record as CR Bank & DB the Intercompany acct
In the company that the deduction was made for I would CR the Intercompany acct but what do I do to wipe out the o/s Payroll Liability amt for that month so that my o/s Payroll Liability report would show it pd
Set up a Clearing Bank Account.
Pay the Liabilities from that account.
Then make a deposit to that account and use the intercompany account as the expense account.
Liabilities are cleared. Bank account is zero and the amount is added to the intercompany account.
