Configure GL Accruals

This section describes how to enable and configure general ledger accruals; the application can calculate estimated expenses through to the end of the accounting month and record these estimates, or accrued expenses, on the general ledger. When accruals are enabled for a pay group, the application:

• Determines the last pay period in the accounting month. This is because Dayforce only calculates and shows the accrual percentage value for the last pay period of each accounting month and the very last pay period defined for the pay group.
• Calculates the number of workdays remaining in the month, either from the pay period’s end date or the pay date, as selected by the payroll administrator.
• Divides the calculated workdays remaining by the number of workdays per pay period to derive an accrual percentage.
• For example, if there are three workdays in the accounting month for a pay group with weekly pay periods, the application calculates an accrual percentage of 60% (three workdays divided by five, the number of workdays per pay period).
• Multiplies the details of the last pay period by its accrual percentage to calculate estimated costs through to the end of the accounting month; these estimates are included in the general ledger export as accrual records, marked "AC" in the general ledger.
• For example, during a weekly pay period, $1,000 was exported to the general ledger with an accrual percentage of 60%, so the application calculates a corresponding accrual record of $600.
• The application also creates an accrual offset record in the general ledger for each accrual record, marked "AO" in the ledger. Accrual offsets have the same details as their corresponding accrual record except the amount is multiplied by negative on (-1); if the original accrual record was a debit, the offset is a credit of the same amount, and if the original accrual record was a credit, the offset is a debit of the same amount.

Configuring accruals involves:

• Enabling accruals at the pay group level: Controlled in the Payroll Properties and Pay Calendars tabs of Pay Setup > Pay Group, the application only includes accruals in the general ledger if the pay group is configured to allow them.
• Defining GL accruals: Configured in the Accruals sub-tab of the Allocations and Accruals tab of Payroll Setup > General Ledger, GL accrual configuration defines which debit and credit line items to accrue, and which allocated accrual targets to include in the general ledger.

Configure Pay Groups for GL Accruals

To enable general ledger accruals for a pay group: 

1. Go to Pay Setup > Pay Group and select a pay group.
2. Select the Payroll Properties tab.
3. In the Net Pay Setup section, select the Include GL Accrual checkbox.
4. Select the Pay Calendars tab.
5. Click Calculate GL Accrual Percent.
6. In the Calculate GL Accrual Percent dialog box, in the Business Days section, specify what days are business days by selecting the corresponding checkboxes.
7. The business days selected determine which days the application counts when calculating the accrual percentage. For example, select Monday through Friday as the business days to configure the application to count the number of weekdays remaining in the month.
7. In the Calculate GL Accrual Based On section, select Period End Date or Pay Date depending on how you want the application to count the number of business days left in the month.
8. Select the Override GL Accrual checkbox to calculate the accrual percentage for each applicable pay period, even if it already has a value in the GL Accrual % field in the Pay Calendars tab. Clear the checkbox and the application only calculates the percentage and populates the GL Accrual % field for pay periods that do not already have a value.
9. Click OK.

The application calculates the accrual percentages for each appropriate pay period (the last pay period in the accounting month) and displays it in the GL Accrual % field. You can override the percentage, if needed.

Configure GL Accruals

This section describes how to configure accrual records—the accrued expense and accrual offset—and how they are displayed in the general ledger.

You define which accrual records and accrual offsets are allocated in the Line Items to Accrue section in the Accruals sub-tab of the Allocations and Accruals tab. For example, to allocate the AC records created for taxable benefits, select Taxable Benefits in the Eligible Earning Types field.

If the Accrue Per Original Allocation checkbox is cleared in the Allocations and Accruals tab, you can apply further filters in the Allocated Accruals section so that the application applies accrual records and their offsets only to the appropriate payroll expenses.

Before You Begin: You must already have configured at least one GL allocation grouping and assigned it to the employees whose payroll expenses you want to generate accruals for before you can define what payroll expenses are accrued. See Configure GL Allocations.

To define GL accruals:

1. Go to Payroll Setup > General Ledger.
2. Select a GL allocation grouping in the Allocations and Accruals tab.
3. Click the Accruals sub-tab.
4. Configure which payroll expenses are accrued by selecting the appropriate options in the Line Items to Accrue section under Debit. Use the Eligible fields to generate debit line accrual records for the items you select. use the Ineligible fields to not generate debit line accrual records for the items you select.
5. Configure which credit line items to accrue by selecting the appropriate options in the Line Items to Accrue section under Credit. Use the Eligible fields to generate credit line accrual records for the items you select. use the Ineligible fields to not generate credit line accrual records for the items you select.
6. If the Accrue Per Original Allocation checkbox is cleared in the Allocations and Accruals tab, you can define how the application applies accrual records and their offsets, if necessary, in the Allocated Accrual Targets section. Use the Eligible fields to generate accrual records for the items you select. use the Ineligible fields to not generate accrual records for the items you select. Select the GL Credit Net checkbox to generate an accrual record for net pay.
   
7. Once filtered, the application creates AC and AO records that match the original payroll expense.
   
7. Click Save.