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Old 03-12-2002, 04:19 PM
butterp1998 butterp1998 is offline
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Location: Maryland
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Unhappy Accrual of Salary Expense

I expected QuickBooks to be a fully accrual compliant software system. It appears that accrual reporting is possible for A/P and A/R, but not for payroll expenses. For payroll QB appears to do cash basis reporting only.

We're a service firm and the bulk of our expenes are employee salary. At the end of any period we have a substantial amount of salary liability until paychecks are issued a few days later. We use timesheets and have entered the hours worked through period end. Payroll is generated from time data, but until the paycheck date I can find no way to a) report the accrued salary expense, and b) show the accrued salary liability on the balance sheet. This seems to be true even if the paychecks have been created but the paycheck date hasn't arrived.

Does anyone know how to perform the basic GAAP reporting in QB? I'm using QB Premier 2002.
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Old 03-12-2002, 05:37 PM
Joey Joey is offline
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Location: South Florida
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Quickbooks is designed for small business financial accounting and only accrues the A/R and A/P as you stated. It does accrue the payroll liabilities as the paychecks are created also but it won't do full GAAP accruals.
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Old 03-13-2002, 04:53 AM
gibbo gibbo is offline
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I am not sure if what I am about to suggest is exactly what you need, but it might get you thinking.
Create a "Dummy" bank account. Call it Payroll or something. Create the Payroll Liability Accounts you need. Now each week when you enter the wages, write a cheque for a Nil amount in the "Payroll" Bank account. Post the wages as POSITIVE figures to the expense account and the same total amount as NEGATIVE figures to the Liability accounts.

Now the wages show as expenses as they occur, but no payments made. When you write the cheques to the staff (from your real Bank Account), post against the Liability account. The same for paying the other withheld amounts.

If you do not know the breakdown of the withheld amounts at original posting of the wages, just throw into one Liability account. Then use a similar in - out structure on the payment cheque to take it from the generic account into the correct liability accounts.

Hope this helps.
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