Friday Feature – Payroll Encumbrances

My husband and I just bought a home so we are on a very tight budget, and that means we have to know what expenses are coming and set aside funds for those expenses. It is kind of like encumbering but on a very small scale.

Obviously, school districts have a lot more money and a lot more people involved in the spending of funds, especially when it comes to salaries and benefits. We have all heard that 80% to 90% of school funds are spent on salaries and benefits, so most districts encumber their salaries and benefits to keep everyone on the same page. Makes sense.

Escape Online supports multiple options for encumbering salaries. Once you turn on the Payroll Encumbrance flag (in the Org record), you can pick and choose what type of pay gets encumbered. Check it out.

Positional Pay – This is for all your salaried employees. As each month’s payroll is approved, Escape Online automatically creates the salary encumbrances for the rest of the year and reverses or cancels the previous salary encumbrance (more about this next week!).

Position Changes – This is for your mid-month changes. Every time a user makes a change to a position or a timecard, Escape Online creates the adjusting encumbrance journal entry for that change. When payroll is processed again, the adjusting encumbrance JEs are handled along with positional pay (above).

Timecard Assignments – This works the same as positional pay but is for timecard employees. Escape Online computes default units for timecard assignments for “future” payrolls, defaulting the number of paid days for the pay period. The pay compute creates “future” records as pay detail. Everything is encumbered and unencumbered automatically as each pay date is approved.

Hourly Employees – This is a special flag for customers that import payroll encumbrances. Obviously, the imported JE has the encumbrance already spelled out.  The automated part is in the unencumbrance, just like positional pay.

As you can see, there are many ways to keep your pay encumbrances up to date. Next week, we will talk about what comes next: unencumbering and the options you have for that!