If you have WSIB in Ontario and you have balance owing to you, how do you deal with that over-payment in your Xero file? Or any other Workmans' Compensation entity for that matter (most of the text is written with WSIB in mind because that's the province we get the most questions from)? Don't fret, we'll show you what you can do to track it properly without resorting to a manual journal entry.
First things first, let's make sure you have an account setup on your balance sheet to track the money. We use a liability account for this even though it is money owed to you, because the typical use of the account is as a liability owing and we don't like duplication of accounts. It should look something like the image below. Keep in mind that you want to make certain that you have Enable payments to this account checked for this to work smoothly.
Once that is done, its time for a credit note. That's the ticket to making your balance sheet match the WSIB statements you receive when money is owed to you. Your credit note should look something like this where you end up receiving the interest as income (ignore the receipt tracking field if you don't have that setup in your file):
You'll notice that we've filed in the Receive a cash refund section after we've approved the credit note. When you click on the [Add Refund] button, this is actually the piece that pushes what's owing to you into your workers compensation liability account.
Are you like me and want to check your work? Two steps for you to check:
1) Pull the Balance Sheet and check that the liability account balance you are using matches your WSIB statement.
2) Pull your Profit & Loss and check that your Interest Income transactions show the amount you've earned from WSIB.
If you have any questions, let us know! We can be found on Social Media with the handle @WeAreAeble or by email at firstname.lastname@example.org.