Accounting entries convert each payroll into debit and credit lines ready to be exported to your accounting system. With tags, amounts can be allocated according to dimensions such as department, project, or location. The system can then directly generate an accounting entry that is already allocated, meaning already distributed according to these categories, ready to be exported without manual adjustments.
| An active accounting integration is required to use tags. Expense and liability accounts come from the connected accounting system. Without integration, there are no accounting rules to configure and tags cannot be linked to any accounts. |
In this article
Creating Tag Groups
Tag groups represent categories used for payroll allocation, and tags are their values. For example, a Department group containing Marketing, Sales, and Admin; an Operating Site group containing Montreal and Quebec; a Origin group containing International and Local.
The person responsible for payroll can create tag groups as follows.
- In Folks, go to Payroll > Dashboard > ☰ > Business Settings > Tags.
- Click + Add Tag Group.
- In the window that opens, enter a name for the tag group. You can also add a description and select a colour.
- Check the Journal Entry Dimension option so that the tag group is used as a dimension in journal entry reports. A business entity can have up to three journal entry dimensions.
- Click Save.
Once the group is created, to add tags, click on it then click + New Tag.
You can edit or delete the tag group.
Assigning Tags to an Employee
The next step is to assign the appropriate tags and allocations to each employee.
An employee can have tags from multiple groups at once, and their compensation is allocated independently within each group.
Any changes in structure or allocation must be manually updated on the employee’s record.
For each created tag, click the three dots > Tag employees or click on the tag itself to assign employees and contractors.
Select the desired employee(s) then click Assign.
Then go to the employee’s record (menu ☰ > Employees) and click the Tags tab. You will see the assigned tags, or No tags assigned if none have been assigned. You can assign allocations by clicking Edit Tags, then Add Allocation. The menu shows existing groups and, for each, its tags. The total allocation must be 100%.
Click Save.
Configuring Accounting Rules
Once tags are assigned, accounting rules link each tag to an expense account and a liability account. This step makes the allocation usable in the entry.
| You must have defined general ledger codes to write rules and ensure the accuracy of reports and exported accounting entries (Business Settings > GL Codes). The rules assign general ledger codes to payroll items based on tags and payroll type. |
The configuration must cover all types of lines you want allocated, including the employer portion of statutory deductions. If you allocate your expenses across each of your departments, you must configure rules so these contributions are recorded in each of your departments, not just the earnings.
In the dashboard, click > ☰ > Company Settings > Accounting Rules.