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Bethmw

Source Deductions Payment Entry Date

SOLVED
Posted By

I have been having a bit of a debate with a colleague.  Colleague is adamant that the entry to clear the source deductions and create a payable to the CRA must be dated for the next month, preferably to them, the 15th.  They say that the amounts in source deductions MUST show on the Balance sheet in their ledger accounts on the last day of the month.  Says every bookkeeper they know does it this way and no accountant would say otherwise.

None of the bookkeepers that I know do it this way.  All of them date the clearing entry as the last day of the month in which the source deductions are incurred. 

Colleague says that the deductions do not appear on the Balance sheet if the entry is dated on the last day of the month.  I say, they are on the Balance sheet in the payables. 

Entering the date as the 15th of the next month causes the payroll remittance report to have columns that do not match and the first column is completely inaccurate.  Colleague says that the first column in that report is unnecessary and we should ignore it and possibly find a way to remove that column from the report.

Please weigh in on this debate and provide reasoning if you have time.

Thanks in advance.

  • 0

    Hi 

    if you are using the remittance module to make payments to CRA,  the box that refers to the end of the remitting period is important and should reference the pay-period end date, if you pay the remittance right after payroll processing then the payment date on the check should be the same, hope this makes sense 

    MPG

  • +1
    verified answer

    I am the resource person for the bookkeepers in a public practice accounting office.  Here's what I tell the bookkeepers:

    1. If you're creating an accounts payable 'invoice' to record your Receiver General payment, then MOST OF THE TIME (but not at yearend) it makes most sense to date the 'invoice' at the end date of the period you're remitting for, and the payment of that invoice the actual date you make the payment.  So for monthly remitters, you would usually date the 'invoice' the end of the month.  This is to parallel the way you enter accounts payable invoices from normal suppliers - if you receive a January 31 invoice from a supplier, you're probably going to enter it in your system as January 31 even if you didn't get it in the mail until the 10th.  And you'll date the payment on whatever date you actually pay.

    2.  It is nice if you set things up so that your source deductions accounts will usually clear to zero after each payment - this is a really easy way to check that you've submitted the right amount of money year-to-date.  This is more likely to happen if you date the 'invoice' at the end of the month rather than the 15th of the following month, as there could easily be weekly or biweekly payrolls between the end of your remitting period and the 15th.

    3.  If you want to make things a bit easier for your yearend accountant, and if you remember, then it is nice if you switch things up just slightly at the end of fiscal year.  This is because accountants often have to segregate 'payroll related' payables from 'normal' payables, and this is easier for them to do if you date the 'invoices' one day later.... the first day of your new fiscal year rather than the last day of the fiscal year that's ending.

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