How Do Department Assignments Work and Why Are Some Unassigned?

Lightning Payroll uses departments to split the cost of each pay across your cost centres on reports and GL postings. Any part of a pay that is not allocated to a department is reported as Unassigned. This article explains how department assignments flow through to your reports, why amounts become unassigned, and how to correct them.

How Department Assignments Work

There are three levels of department assignment:

1. Company departments are the list of departments your business uses. These are set up under Company >> Departments.
2. Employee departments are each employee's default split, set under Employees >> Details >> Departments. For example, an employee could be assigned Sales 60% and Admin 40%.
3. Pay departments are the split saved on each individual pay. When a pay is created, Lightning Payroll copies the employee's departments onto it. While the pay is still pending, it is refreshed from the employee's current departments whenever the pay run is refreshed.

Once a pay is completed, its department split is saved with that pay. Changing an employee's departments later only affects their pending and future pays. It does not change pays that have already been completed. To change completed pays, use the Retrospective Tool (see below).

If an employee works rostered shifts that have a Department Allocation (under Employees >> Shifts), the pay's split is calculated from those shifts instead, based on each department's share of the shift amounts.

Please note: assigning or changing departments does not change any pay amounts, tax, super or KiwiSaver. It only changes how the cost of each pay is allocated on reports and GL postings.

Why Are Some Amounts Unassigned?

The unassigned share of a pay is 100% minus the total of the department percentages saved on that pay. Unassigned amounts usually come from one of the following:

• The employee had no departments assigned when the pay was completed, so the whole pay is unassigned.
• The employee's department percentages added up to less than 100%. For example, Sales 50% and Admin 30% leaves 20% of every pay unassigned.
• A department was deleted in the desktop app after pays had been assigned to it. The amounts from that department become unassigned on those pays.

Lightning Payroll does not force the percentages to add up to 100%. In the desktop app, the Percentage Total on the employee's Departments tab turns red when the total is not 100%. In the online app, a warning appears if the total is more than 100%, but not if it is less, so check the total when you assign departments.

How Departments Appear On Reports

• Departmental Analysis (called Departmental Report in the online app) groups pays by the departments saved on each pay. Pays with no department at all are listed under Unassigned Department.
• The GL Postings reports on the Reports screen (Suggested GL postings in the online app) have a Group By Department option. Each department receives its percentage of every amount, and any unassigned share appears in a separate Department Unassigned section. These amounts are still included in the grand totals.
• The Pay Report Builder and the leave liability reports also have a Group By Department option, with unassigned amounts shown in their own group.
• The Employee Report Builder groups year-to-date figures by each employee's current departments, not the departments saved on past pays. If you change an employee's departments, this report shows the new split for the whole period.

How Departments Affect GL Postings

GL codes are set up under Company >> GL Codes. When you edit a pay category, you can turn on Split By Department (When Applicable) and enter a separate GL code for each department in the department codes table below it.

When you export GL Postings (CSV Export):

• If Split By Department is off for a pay category, that category is exported as a single line using its main GL code.
• If it is on, the category is split into one line per department, with the department name added to the label, for example Wages - Dept: (Sales). Each line uses that department's GL code, or the main GL code if no department code has been entered.
• Any unassigned share is exported as its own line labelled Dept: (Unassigned) and is posted to the category's main GL code.

If you submit journals to Xero and have entered a Xero Department Tracking Category Name on the GL Codes screen, each department line is sent to Xero with the department name as its tracking option. The tracking option names in Xero must match your Lightning Payroll department names exactly. Unassigned amounts are sent with the tracking option Unassigned, so assign those amounts to a department before submitting the journal.

How To Update Departments

Company Departments

Go to Company >> Departments to add a new department or edit an existing one. Each department has a name and optional notes. Renaming a department updates it everywhere it is used, including past pays.

Take care when deleting a department:

• In the desktop app, a department cannot be deleted while it is linked to shifts, pay rates, allowances, bonuses or processed pay items. If it is only linked to employees and pays, you will be asked to confirm twice. Confirming removes the department from every employee and every pay, including completed pays, and those amounts will then show as unassigned.
• In the online app, the Delete option is only available for departments that have no employee or pay history.

If a department is no longer used, consider renaming it or moving its employees to another department rather than deleting it, so your past reports stay accurate.

Employee Departments

In the desktop app, open the employee and go to Employees >> Details >> Departments. Add each department the employee works in and set its percentage. Edit or remove rows as needed, and make sure the Percentage Total shows 100%.

In the online app, open the employee and select Details >> Departments. Click Add New, choose the Department Name, set the Percentage Assigned and save. Repeat for each department so the total is 100%.

Changes here apply to the employee's pending and future pays. They do not change completed pays.

A Single Pay (Edit Pay Screen)

In the desktop app, open the pay in the pay editor and click Department % at the top of the window. Adjust the departments and percentages in the Edit Department Percentage window, then save the pay. This button is not available when Enable Advanced Departmental Options is turned on, because the split is then worked out from the department tags on shifts and pay rates.

In the online app, open the pay from the Pays screen and select the Departments tab. Add, edit or delete department rows, then click Save & Close (or Save & Next). If the department you need cannot be added to the pay, add the employee to that department first under Employees >> Details >> Departments.

Please note: saving the pay completes it, which keeps the split you entered. If a pay is left pending, its departments are refreshed from the employee's settings the next time the pay run is refreshed, and your changes will be replaced.

Several Past Pays (Retrospective Tool)

To change the departments on completed pays, including pays showing as unassigned, use the Retrospective Tool:

1. Go to Tools >> Retrospective Tool.
2. Set the Start Date and End Date to cover the pays you want to change. Only completed pays are included.
3. Select the employees whose pays you want to change. Turn on the option to show terminated employees if you need to include them.
4. In What would you like to change?, select Departments. Each pay is listed with its current department split. Pays with no split shown are fully unassigned.
5. Select the pays that need the same department split.
6. In the desktop app, click Edit. The first selected pay opens in the Edit Department Percentage window. Set the departments and percentages, then confirm the change. In the online app, tick the pays in the Retrospective Department Editor, click the edit button, set the departments and percentages, click Save Changes, then click Finish and confirm the Confirm Retrospective Changes message.

A backup is taken automatically before the changes are saved. The split you enter replaces the existing split on every selected pay, so if different employees need different splits, run the tool once for each split (use the employee filter to narrow the list). The Retrospective Tool does not recalculate pay amounts or tax.

Advanced Departmental Options

If Enable Advanced Departmental Options is turned on in the desktop app under Company >> Departments, each pay's department split is calculated from the department tags on company shifts and pay rates each time the pay is refreshed, rather than entered as manual percentages. Make sure every shift and pay rate used on a pay has a department tag to avoid unassigned amounts.

Recommended Checks

• Check that every employee's department percentages add up to exactly 100%.
• Before exporting GL postings, run the GL Postings report with Group By Department turned on. If a Department Unassigned section appears, use the Retrospective Tool to assign those pays before you export.

For more detail, see How Do I Setup Departments?, How Do I Assign An Employee To Departments And Split Their Pay?, How Do I Use the Retrospective Tool to Change Past Pays in Bulk? and How Do I Configure and Export GL (General Ledger) Files in Lightning Payroll To My Accounting Software?