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'AU Payroll - Show Annual leave in the General Ledger' has been merged into this idea

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AU Payroll - Provisions for Annual and Long Service Leave

We need to know how much to provide for on the balance sheet for annual leave and long service leave each month and track these for our financial statements. All the information is available via Xero payroll (leave balances and pay rates for each employee as well as leave accrued and leave taken) but in order to account for this correctly we are expected to export reports and do the calculations ourselves. And we need to maintain external files to reconcile this to each month.
If Xero is offering a payroll and leave tracking function it should ensure the accounting entries for that function are captured correctly. This includes leave expenses and leave provisions / accruals.
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Robyn Hayward shared this idea  ·   ·  Report…  ·  Admin →
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Not in pipeline  ·  AdminDavid Reynolds (Admin, Xero) responded  · 

Hi everyone, thanks for your feedback on automating leave provisions. Currently Xero does not automatically include leave liabilities on the Balance Sheet. Some of you have mentioned workarounds such as reviewing the Leave Balances Report and creating Manual Journals to include the liability in your reporting.

While we’re dedicated to streamlining payroll calculations, our product team confirmed this specific idea isn't on our foreseeable roadmap. We’ll be updating the status to Not in pipeline. The idea will remain open for votes so we can continue to monitor community interest.

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  • Matheus Toledo Cupertino commented  ·   ·  Report

    Automatic Provisions for Employee Entitlements

    It would be highly beneficial if Xero could automatically generate accounting provisions for employee entitlements such as:

    Annual leave

    Personal/carer’s leave

    Long service leave

    Based on the payroll accruals already calculated within the system, Xero could automatically post monthly journals to recognise the provision expense and liability in the general ledger.

    Currently, many businesses must calculate and post these provisions manually, which increases the risk of errors and inconsistencies. Automating this process would significantly improve accuracy, efficiency, and compliance with accounting standards.

  • Heather MacCulloch commented  ·   ·  Report

    I agree. It is just another journal that has to be manually done each month when Xero could do it automatically

  • Svetlana Glavenko commented  ·   ·  Report

    We have used MYOB Acumatica and all journals have been automated, AL and LSL provisions updated.
    Also used ADP as external provider and they did have all relevant journals for AL/LSL automated.
    All depends on settings, Xero is missing critical accounts for AL, LSL Provisions, hence there's no option to create a journal. Also, Leave Balances Report or Leave Transactions Report are quite user unfriendly, both miss Leave Taken Column.
    Very outdated software for Payroll.
    Disappointing service from Xero, no direct interaction, only online.

  • Kumarasamy Manimaran commented  ·   ·  Report

    I support this idea. Atleast the annual leave provision should be automated, as it is quite straight forward. Long service leave provision is more complex. Thank you

  • Nadya Veryasova commented  ·   ·  Report

    It's annoying that I have to do it manually instead of XERO taking care of provisions for Annual and Long Service leave

  • Svetlana Glavenko commented  ·   ·  Report

    Can Xero take an urgent action and implement the critical change to Payroll, to create Provisions journal to automate Leave Tracking?
    It should be pretty simple. Every other software does this.

  • John McNally commented  ·   ·  Report

    Just moved to Xero and assume posting a payroll run would take care of this. Come on team it no that hard - please implement the change.

  • James Power commented  ·   ·  Report

    We need to be able to account for annual leave transactions in the general ledger but Xero does not currently facilitate this. Is there any chance that an update will be done which will allow this? I know that this has already been raised but it is baffling as to why a basic payroll/GL integration is lacking.

  • Phillip Smith commented  ·   ·  Report

    Is Xero going to make software changes in relation to this provision in the balance sheet ?

  • Oliver Cassidy commented  ·   ·  Report

    Would somebody mind giving a run down on what the journal entries look like that you've been using to link AL and LSL leave provisions and expenses to the Balance Sheet?
    Since moving to Xero a couple of years ago I think all earnings have been paid from the same wages account, which I can change, but want to make sure everything is accounted for correctly so there may be a few steps to this

  • Steven Blaine commented  ·   ·  Report

    Guys this would be a game changer if you could implement it! I've been manually managing my clients annual leave & time in Lieu Liabilities for almost 10 years using Xero.

    I've been happy to do this historically however my business has grown substantially and I'd like to automate processes like this!

    I'm considering moving across to Tanda payroll as they have the ability to automate leave accruals when proceessing payroll..... (journals are created in Xero via their integration).
    Surely Xero could manage to get this functionality sorted!

  • Achini Pathiranage commented  ·   ·  Report

    I would like to allocate the annual leave taken , to the annual leave provision account, instead of the salaries and wages account. Currently, the annual leave earnings rate is set to wages and salaries expense acocunt, and I am unable to change it to a BS account, under payroll settings. It's great if this small can be implimented. Thank you.

  • Souter Rural Industries NZ Ltd commented  ·   ·  Report

    It would be great to prompt business users to review leave balances when an employee is approaching 20 days for budgeting purposes

  • Mandy Espiritu commented  ·   ·  Report

    Just to be able to link paid leave to a separate GL expense account would be useful. Why does all payroll go through 1 wages account.

  • Mitchell Yeo commented  ·   ·  Report

    This is a great idea, came here to submit the same thing. I am amazed it isn't already in existence.

  • lisa brunt commented  ·   ·  Report

    Yes I have the same idea, there should be at least a reminder date on the anniversary of employment so we can start accruing LSL

  • karina harvie commented  ·   ·  Report

    Long service leave accrual. Can there be a way for Xero to automatically add long service leave entitlement on the employees anniversary of employment.

  • Charlie Coyle commented  ·   ·  Report

    It would be great if our AL & LSL leave provisions were automatically linked to our balance sheets

  • Charlie Coyle commented  ·   ·  Report

    It would be great if our AL & LSL leave provisions were automatically linked to our balance sheets