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Old 10-29-2002, 12:38 AM
PHebert PHebert is offline
Senior Member
Join Date: Apr 2002
Location: Seattle, WA
Posts: 286
You need to view your payroll process as three separate cycles. Cycle one is your pay period to pay period cycle. All of the activities within this cycle go into each pay period. Salary and hourly it does not matter. I have never tested to see if you can run into problems by overlapping these cycles. The tax tables might give you slightly different amounts. As an example - if you were to cancel a paycheck from a prior period (the employee lost a check) and you recut a new check you would not get the same tax deductions in QuickBooks. Since you are in the process of testing this out (which I think is an excellant idea by the way), I'd do it in multiple ways to see if anything changes and examine what is changing and why. Other activities in cycle one are the adding of new employees, changing w-4 information, changing dedutions, making any employee changes or updates.

Your second cycle is monthly. This typically would include such things as paying 941 taxes (if you are on a monthly schedule), looking at 940 taxes to determine if deposits need to be made, payment of any deductions to insurance programs or retirement plans and basically building a check list to examine your pay records against. Make sure you process these payments via the payroll liabilities window. A very big taboo in QuickBooks is to post a journal entry that effects any payroll accounts. You will not see the entry on any payroll reports. Cycle one continues as usual without interuption.

Your third cycle is Quarterly. This will include filing all tax reports due for the quarter, which will usually involve state SUTA, some sort of workers comp, 941 reports and so on. (940 report (FUTA) is filed once a year). Some would say that a forth cycle is created at the end of the year, but I like to view this as part of the Quarterly cycle. In any case you will have to make provisions for this in some way, which generally means processing W-2s and by extention 1099s(vendor reports). Both the cycle one and cycle two schedules continue as normal. I live in the state of Washington and we do not have a state income tax. If you are in a state that does, you will have to factor that into your schedules.

Look at your payroll under this model and you should be good to go.
Peter Hebert
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