Here is your complimentary of The Desktop Accountant, a bi-monthly newsletter with tips and tricks for using QuickBooks and QuickBooks Pro.

News:

I am happy to announce our newest seminar, QuickBooks for Accountants, Consultants, and Power Users. This is a one-day seminar for people who support clients using QuickBooks. We cover difficult topics you encounter in supporting your clients. I hope to see you at one of our seminars soon.

Also, I’m just finishing a new book, aimed at helping accountants and consultants. The book is entitled Mastering QuickBooks, Consultant’s Reference Guide. This book includes chapters on fixing files, supporting clients over the Internet, and tons of checklists for setting up client files under various circumstances. The book is fully indexed. The book will be available in June, 1998. If you’d like to receive information when it is released, click here.

Many of our students and clients ask us about coordinating QuickBooks with a Payroll Service. In this issue, we give tips for using QuickBooks with a Payroll Service.

I hope this helps you. Drop me an email with your comments.

—Doug Sleeter

May, 1998—
Using a Payroll Service

Configuring QuickBooks for using a payroll service is a simple, three-step process.

Once you’ve configured QuickBooks, you’ll need to follow one of three methods for entering payroll data. The first method will give you the most detail, but it requires the most data entry. The second method requires a little less data entry, but doesn’t provide full reports. If you don't need any reports, follow the third method.

Configuring QuickBooks for Using a Payroll Service

1. Set up the following accounts in your chart of accounts.



2. Choose File • Preferences and scroll down to Payroll and Employees. Set the Payroll Preferences to Payroll reports only.



3. Choose File • Payroll Info. Set the fields in the Payroll Info screen to reflect your payroll expenses and payroll liabilities accounts.

Method 1: Produces Most Detailed Payroll Reports

1. Enter each paycheck using the Write Checks function. Fill out the check with all the details of the paycheck as shown below. Choose Activities • Write Checks.





2. Next, enter the payroll tax deposits using Write Checks.



3. If you enter your payroll transactions as shown in steps 1 and 2, you can now generate the following detailed report.



TIP: To help prevent data entry mistakes, memorize payroll transactions for employee and for the payroll tax deposit. Then, each time you record payroll, use the memorized transactions. All you need to do is change the figures, but each line is already filled in by the memorized transaction.

Method 2: When Detailed Reports Aren’t Needed

Follow these steps.

1. Enter a journal entry to Debit gross wages and employer tax expense. Enter each employee’s amounts on separate lines as shown. Credit Net Pay Clearing for total net pay, and Credit Payroll Liabilities for the combined employee and employer taxes. To make the payroll reports show figures for each employee, enter the employee name the name field as shown.



2. Enter each paycheck using the Write Checks function. Enter the net paycheck only and code it to Net Pay Clearing. Choose Activities • Write Checks.





3. Next, enter the payroll tax deposit as shown.



4. To check your work, verify that the Net Pay Clearing account has a zero balance. It must always zero out after you finish entering the payroll data.

Method 3: If No Payroll Reports are Required

1. Set up the following accounts in your chart of accounts. You don’t need any payroll liability accounts if you use this method.



2. Choose File • Preferences and scroll down to Payroll and Employees. Set the Payroll Preferences to No Payroll.



3. Record the payroll in QuickBooks by taking the figures from the payroll reports and creating a journal entry as shown.

When You Need Detailed Job Cost Reports

For detailed instruction on using Payroll in QuickBooks or QuickBooks Pro, see Volume 2 of the Mastering QuickBooks Video Learning System. To order your copy of the video, click here.