A journal entry is a term used in payroll to describe information on each payroll transaction, including
- Amount paid
- Employee’s name
- Transaction category
On a global payroll scale, journal entries can become more complex since they need to take into account other factors like differences in regulations, compliance and currencies.
Journal entry examples
- Salary and wages
- Tax withholding
- Employee benefit contributions
Manual vs automated payroll entries
Manual and automated payroll journal entries refer to two different methods of recording financial transactions in payroll accounting.
In the case of manual journal entries, the process involves recording the different transactions separately and manually, including details like name and date. Automated journal entries, meanwhile, means a software is integrated into the automatic payroll system, generates the entries.
For a lot of companies, specifically those with fewer employees and a smaller budget, manual payroll systems can seem like the best option. They may see this system as not only less costly, but also more trustworthy, since the entries are theoretically easier to access this way.
With that being said, manual journal entries require a lot more attention to detail and are more susceptible to human error. Automated journal entries, when produced through a trusted source, can be more efficient and ensure accuracy throughout the payroll process.