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  #1  
Old 11-30-2004, 03:59 PM
Jrhannon Jrhannon is offline
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Recording Payroll

The company I work for uses an outside source for payroll. They have been writing the checks manually and entering the checks into QB's, but the entry is only for the net amount.

QB's help menu outlines how to record payroll expenses that you want to track, which is to set up an expense account for the Gross Payroll, and Employer expenses, and Other Liability Accounts for the employee Federal Withholding, Social Security, and Medicare Taxes. Then they say to write a check for the employee and record the expenses and liabilities for the paycheck in the write checks menu.

I set up an employee named "ALL EMPLOYEES" and then proceded to enter the payroll for the month to this employee. When I finished, I checked the Profit Loss statement and the expense account for the Gross Payroll did not show up. So, I voided the check and entered the same information in a journal entry. That way it worked fine.

What did I do wrong with the write checks procedure as outlined in the help menu.

James.
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Old 12-01-2004, 01:20 PM
Joey Joey is offline
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The first thing was that you read the help statement wrong. It said that you used that method for entering payroll expenses that you want to track with the program. If you have a payroll service, you don't need to track the payroll in QuickBooks. Just use the payroll reports that they give you to make the entries in the books the same way they are going to come out of your checking account so you can check them off when you reconcile.
The first thing is to look at your bank statement and see how the payroll transactions clear your account. Do the paychecks clear individually or in one big debit memo?
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Old 12-01-2004, 09:13 PM
Jrhannon Jrhannon is offline
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Well, I guess I'm really confused. The payroll service does everything but write the checks. We write the checks manually. On the bank statement the checks clear individually, but the debit for payroll liability accounts clear in one debit per pay period. I tried to make a journal entry using the accounts that QB set up for payroll entries, and the system says these accounts are reserved.

That's when I discovered the subject in the help menu. I want to track the gross payroll amount, because that is the amount of the expense for personal services, and also the employer liabilities. I don't need to know the amounts for a particular employee but only in total for the month. All of the information that is needed is on the monthly report from the service, but I was trying to figure out how to enter this information into QB. Since it won't let me use the pre assigned accounts I set up look alike accounts, and I am entering the amounts by journal entry which is fine. It just seems like there should be an easier way.

James.
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Old 12-02-2004, 08:37 AM
Joey Joey is offline
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First you need to create those paychecks in the Write Checks area because you need to be able to check them off when you reconcile. Create each paycheck and at the bottom of the check, charge Salaries & Wages for the Gross amount (from the report) then tab down to the next line and select Payroll Expenses and enter a minus amount for the total withholding tax so the total of the two lines equals the net check above for each employee.
Next use the Write Checks screen and enter another check changing the check number to Debit or whatever you like for the total that they are going to debit your account for the payroll taxes. Charge this whole check to the Payroll Taxes expense account. The net amount that will wind up in the expense account is the difference between what you paid and the employee's withholding taxes and that is your company's net expense.
You can get all this info from the reports and you don't need to track any liability when the payment is done as soon as the payroll checks are cut. The most important thing is to be sure that your total wages equals the wages amount on the 941 returns each quarter and that the detail is entered exactly the way it clears your checking account.
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Old 12-03-2004, 10:01 PM
Jrhannon Jrhannon is offline
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I thought that I was doing the posting as you outlined, so I went back and tried it again. It worked as advertised, and I don't have a clue as to what I did wrong the first time. I an trying to create financial statements for the current year with a new company file because they have QB's so messed up it would take forever to figure out what they have been doing. That's why I created a fake employee named "All Employees". I can then make all of the payroll entries for the month with just writing one check.

Thanks for your help.
James.
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  #6  
Old 12-04-2004, 09:34 AM
Joey Joey is offline
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Well that's real easy to do James, but how do you plan on reconciling your checking account if all the paychecks don't clear the bank? How are you going to check them off? What you skimp on now will come back to bite you later. Are you sure you want to take the quick route? The way that I told you was so you could check off each check as it clears on the reconcilement.
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  #7  
Old 12-04-2004, 08:58 PM
Jrhannon Jrhannon is offline
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The office clerk has been real good at entering checks and deposits into QB and is fairly accurate. I have been taking the detailed transaction report and exporting it to Excel and then summarizing the data and checking it against the Bank Statements. I has all been balancing fairly easily, just time consuming. Then I take the summarized transactions and enter the data back into the new company that I created.

The owner hasn't had a financial statement in over two years, but I will have him the current year update(thru October) in another three or four days.

I guess some people are lucky in business that they can survive without knowing what is going on.

James.
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