Accounting is not just about numbers, but also the letters commonly used in acronyms and abbreviations. Accountants will tend to abbreviate account names or terms when writing journal entries or reports. This saves both time and space when filling out paperwork. While an everyday language to number-crunchers, shorthand notes can confuse others who review numbers associated with a company’s financial information.
P/R is the shorthand abbreviation for the word “payroll.” Accountants often use the abbreviation when hand-writing journal entries for management review. Computerized accounting systems usually don't present payroll information using this abbreviation unless programmed specifically by a company.
Many accountants accepted the use of shorthand when accounting was a more manual system. The current use of computers and accounting software typically limits the amount of writing done by an accountant. In the old days, however, the writing out of words like “accounts payable,” “accounts receivable” and even “payroll” was tedious and time-consuming. Shorthand abbreviations allowed accountants to process more information by decreasing time spent when writing journal entries.
Most companies have numerous payroll accounts in the general ledger. To accurately define accounts, accountants may write “P/R Taxes Payable” or “P/R - Production Department,” among other designations. This provides clarity for large companies with multiple payroll accounts.
Standard double-entry accounting requires a debit and credit for each journal entry in the general ledger. A payroll entry, for example, typically debits wages expense and credit accounts such as taxes payable, benefits payable and net payroll. This entry recognizes payroll due to employees. Once a company pays money owed to employees, more entries are necessary. The first entry will debit net payroll and credit cash; the second debits taxes and benefits payable and credit cash. This usually completes the payroll period process in the accounting department.