I created payroll entries and submitted the salary slips. Each of the salary components has a Default Account defined.
My next steps were:
Payroll Entry -> Make Bank Entry -> Submit Journal Entry with Bank Account as credit and Payroll Payable (under liabilities) as debit.
Since each salary component has a Default Account defined, I was expecting the salaries to be booked under those expense heads upon submitting the journal entry (i.e. credit Payroll Payable and debit “Staff Salary” under Expense Account for the salary components whose Default Account is “Staff Salary” etc).
However, this is not happening. Instead, the salary payments from all previous months’ payrolls accumulate as liabilities in Payroll Payable (and since we already paid them this seems incorrect).
So I guess my questions are:
Is the above described workflow correct? If not, what are the Default Accounts in Salary Components used for?
How can I get the ERP to book salaries under their salary component Default Account? By my understanding it should be: Cr - Bank and Dr - Payroll Payable, then Cr - Payroll Payable and Dr - Default Account for Salary Component