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You can set up offset accounts to overhead and payroll for jobs to the employee's payroll department, which may or may not be the employee's home department. This allows more granularity and detail when employees perform work under a different payroll department. 

Many companies set up payroll so that all employee wages and overhead burdens such as benefits, taxes, and tool costs charge to the Payroll departments such as electrical or excavation and these departments have managers that carry P&L responsibility. Jobs and service calls are assigned to divisions and may use resources from multiple departments.

As costs hit jobs, an offset account is credited, and a Cost of Goods Sold Account is debited so financial reporting can be done by division. Often, though, this offset is only at a company level instead of a Payroll department level, so department profitability can skew as a result.
You  You can assign accounts at the department level, and further down at the pay code, overhead code, or cost element level. This is accomplished in one window: Payroll and Overhead Accounts Setup.

Example scenario: If a member of the Electrical department, in the Residential division, works on a Job in the Commercial division for 30 of 40 hours in a week, the costs of the member's benefits and tools costs for all 40 hours go to the Electrical department but 30 hours' worth of revenue is generated in the Commercial division. As a result, the division has profit, even with the Cost of Goods Sold amounts that it carries, and the Electrical department does not. If this happens often, financial reports can start to indicate that the Electrical department and even the Residential division is not contributing to profitability.
Note:

Note

At minimum, you MUST assign an All - Default: REQUIRED account for each origin/account type combination in the account tree. However, this account would only be used if you did not have accounts assigned anywhere in the individual Division tree levels. You can access the Payroll and Overhead Offset Accounts Setup in the following ways: From the main menu, choose Microsoft Dynamics GP > Tools > Setup > Job Cost > Account Setup > Payroll Offset Accounts. In Service Management, from the Invoice Accounts window (Microsoft Dynamics GP > Tools > Service Management > Invoice Setup > Invoice Accounts > Payroll Offset button). In Service Management, from the Maintenance Accounts window (Microsoft Dynamics GP > Tools > Service Management > Maintenance Setup > Accounts > Payroll Offset button).

Table of Contents

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About the window hierarchy

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In this section, we will look at a sample General Ledger after payroll has been posted, in this case, through the Signature Transaction Entry window. Included is where from within the Payroll and Overhead Offset Accounts Setup window the accounts were grabbed.
After running Signature Payroll Post, the posting journal report contains account information, including GL accounts and amounts. Below is a table of the accounts and windows/areas within Signature Job Cost from which the accounts were taken.

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Accounts moved from the existing windows to the Payroll and Overhead Offset Accounts Setup window

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• Job Cost Overhead Detail Accounts window (in Job Cost) - This window was removed during upgrade.
• Expense and Travel Offset Account Setup window (in TimeTrack) - This window was removed during upgrade.
• Invoice Accounts - Costs window (in Service Management) - This window was retained because it is still used by plus button transactions.
• Maintenance Accounts - Costs (in Service Management) - This window was retained because it is still used by plus button transactions.

Account conversion diagrams

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