how to add payroll entries if not using qb payroll?

i use bank of america easypay. only real reason why is that it's free for me and i started using it before quickbooks and everything is setup.
anyways, on to my question: how does one go about entering a payroll
$$ for an employee without having payroll setup and actually processed through qb? i'm assuming it's through doing a manual general ledger entry? can you point me in the right direction.. a helpful link maybe.. on step-by-step instructions?
thanks,
kyle
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This is the type of question that is best answered by your accountant. He/she can show you how to gross up your payroll and enter it a journal entry. How often the entry is made is up to you. For most of my clients using outside payroll services this is done once per month.
The Allan Martin black challenge is as follows:
Payroll is processed by an outside service and payroll checks are cut using the same operating bank account which is used for other cash disbursements. Payroll is grossed up and recorded as a single journal entry once per month.
What is the most efficient method of performing a bank reconciliation at the end of the month in QuickBooks?
Who is up to the challenge?

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wrote:

Allan-I've found the best way to do this is one journal entry with each net check entered on separate line to bank acct with the correct ck # in the memo column. The rest of the JE (gross wages, tax liabilities & expense and anything else added to or deducted from p/r checks) is done lump sum to correct accounts. In the reconciliation screen, you can choose to show the memo column which enables you to easily & correctly select the items that cleared.
Do you have a better suggestion? N Owen To reply, please change "ONE" to numeral
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I said ping pong balls not King Kong's balls. Entering each check is the least efficient method. I said the most efficient.
Naturally I am not talking about a payroll with only one employee, for my challenge assume 100 employees paid weekly.
Now who is up to the challenge?

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For anything over 10 employees I would suggest using a payroll service that integrates with QB. I agree that entering checks for that many people is not efficient. At one of my clients, we had 8 employees using a payroll service that did not integrate with their accounting software (peachtree). They did a large JE each payroll period but there was no way of properly doing the bank rec. We ended up creating a spreadsheet with the check numbers and the net amount to use for the bank recs. The JE was adjusted at the end of the month to reflect the appropriate uncleared vs cleared checks but it was a pain in the arse.
The only other suggestion that I can think of off of the top of my head would be to use excel to import the data into QB but I have not played enough with importing to know if this is possible. My gut says that if this was possible then setting up a template to enter the net amounts and check numbers would/could/should be slighly more efficient but from experience the individual checks really need to be entered into the system. ymmv
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Can we also assume that not all paychecks will clear the bank account during the statement period?
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Does a bear shit in the woods? Yes, that goes without saying.
Are you up for the challenge?

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I think there are several ways that payroll can be handled outside of using the QB payroll service. I am assuming that one is either using a payroll service or the taxes are being manually calculated.
Payroll service: I use the Write check function to record the net paychecks with the correct check number as assigned by the payroll service.
I then do a JE to record the taxes for both the employer and employee side of the equation:
DB: Payroll Expense for the EE Tax withholdings DB: Payroll Tax expense for the ER Tax liabilities CR: Bank account
I do this for each payroll period so that I can see the actual check numbers and taxes transfered to the payroll service to match how they will show up in the bank statement.
manual calculation: For those clients that are not using a payroll service, the paychecks (write checks) would contain the following:
DB: Gross Payroll expense CR: Tax payable account(s) for the EE Tax withholdings (as negative numbers) CR: bank account for net paycheck amount
I create the appropriate payroll Items so that w-2s can be properly created at year-end. I use Items for Federal, Soc Sec, Medicare, FUTA, State inc tax, State unemployment. Make sure you create items for both the ER and EE portions where applicable.
And the JE would only contain the following:
DB: Payroll tax expense for the ER taxes CR: Tax Payable account(s) for the ER Taxes
The actual payments (use write checks) to the government agencies would: DB: tax payable accounts CR: bank account
Again, all of these transactions match how they will show up on the bank statement so that doing the bank recs for these transactions are very straightforward.
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Blab, Blab, Blab, Blab, what about my challenge?
Payroll is processed by an outside service and payroll checks are cut using the same operating bank account which is used for other cash disbursements.
Payroll is grossed up and recorded as a single journal entry once per month.
What is the most efficient method of performing a bank reconciliation at the end of the month in QuickBooks?

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Your "single journal entry" has how many detail lines? Hard to know what the most efficient method for reconciling would be without knowing the level of detail involved.
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Your query is not relevant to my challenge, but I will answer since it is my challenge.
It's a complicated payroll. Lets say 35 to 40. Naturally only one detail line for the net payroll charge to checking for the month. The journal entry has also been memorized from a prior month so all that needs to be done is enter the new numbers.

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Using the service's cheque register to determine the o/s cheques at the reconciliation date the credits to the bank on the monthly payroll entry should consist of 2 numbers -total $ cleared and total $ o/s.
Later....
David S>

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Allan Martin wrote:

I'll second that. I pitch my paychecks in the drawer. When the drawer gets full, I take 'em to the bank. Don't most folk operate that way (except for the terminally anal, of course)?
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What I do is make a deposit into my checking account for the total of the "uncleared" payroll checks. After I reconcile the checking account, I delete that deposit.
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Elaine, wear your black belt proudly. You have earned it. While my answer is different and does require one less step in all fairness yours is an excellent method and deserves reward.
What is sad is the fact that there are many out there that waste time entering each payroll check manually into QB.
My method is to simply subtract the outstanding payroll disbursements from the bank statement balance and enter that number in the ending balance field of the bank reconciliation form.

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Alan, your method IS better, but I have to show my accountant that my ending balance and the bank's ending balance agree.
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I leave an audit trail written on the first page of the bank statement as follows:
Balance per this statement xxxxxx Less: O/S payroll transactions (attached) xxxxxx Balance used for QB xxxxxx
I am a CPA and I would give anyone my blessing if the above were used.

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You do not need to record payroll in Quickbooks. Easypay and other outsources does your payroll for you and will give you a summary each payroll. At the end of the year you will receive your YTD amounts for the tax slips (in Canada T4's).
Government remittances in the US can't be really any different than Canada. We have used a third party/outsource payroll for 15 years and never had any problem. With the third-party software we just have to import our payroll. But when we outsourced it we used a general journal entry to record payroll. 1) Edit>Preferences>Payroll & Employees>Company Preferences>Select "No Payroll". 2) The payroll summary sheets should have the information you need. They should have given you a listing of: Gross payroll, CPP Employee, CPP Employer, EI Employee, EI Employer, Income Tax Employee, any deductions etc. and net payroll. Most payroll sevices will only take ONE entry out of your bank account per payroll (not one item per person) so you need only enter one transaction. If they take individual cheques, just use "Write Cheques" and allocate them to a Payroll Clearing Account. 3) "Write Cheque" payable to Bank Statement Items. Enter the net payroll amount from the summary for the cheque value. Under the "Expenses" tab record Gross Wage amount to the appropriate wage expense; CPP Employee+CPP Employer+EI Employee+EI Employer and Income taxes go to Payroll Benefits Liability. The deductions etc. go to the appropriate expense account. If each cheque comes out of the bank then use a General Journal Entry instead of "Write Cheques", allocate to the same accounts and instead of cheque amount allocate the net payroll amount to credit the Payroll Clearing Account. 4) As you are not using the QB's payroll module you DO NOT use the "Pay Payroll Liabilities". All you need to do is to "Write Cheque" to the government for the amount and allocating it to Payroll Benefits Liability account.
Cat
Allan Martin wrote:

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Outsourced payroll services should be able to supply classes etc. As to job costing we "rigged" QB's payroll module to give us job costing only. We set up payroll items for the amounts that effect job costing (i.e. wages, payroll taxes, company contributions and WCB or other taxes). We set the items up so that they only impact one account - Payroll Clearing). Each pay period we record the employee "Timesheets" allocating to the various jobs. We then "Pay Employees". The "rigged" payroll gets allocated to the various jobs. Payroll Clearing should be a NIL balance.
Cat
snipped-for-privacy@shaw.ca wrote:

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