how to add payroll entries if not using qb payroll?

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?

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

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?

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.

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

Can we also assume that not all paychecks will clear the bank account during the statement period?

Does a bear shit in the woods? Yes, that goes without saying.

Are you up for the challenge?

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>

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?

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.

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.

Very close but no cigar, some checks can remain oustanding for months. Your method introduces needless potential complications. Keep it Simple.

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)?

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.

At the end of the second month you reverse the o/s entry from the first month and redo those items as 2 parts again -month 1 cleared during month 2 and month 1 o/s at month 2 , then do the second month entry in the same fashion . You can't do it any simpler.

Read my lips, TOO COMPLEX. KISS.

Who will get the Allan Martin Black Belt? Is there no grasshopper among you? I would call upon our friend Tara but I'm certain she enters each payroll check manually. Can't blame her, I would do the same if I got paid by the hour doing it that way..

I memorized a payroll check with all of the entries. I keep my payroll info in an Excel file and manually import the data into he payroll check.

I also have a memorized payroll tax template that is a journal entry for the employer's portion of social security and medicare. This is to keep track of what we owe the state and feds.

Finally, I have 2 more memorized journal transaction when we pay the state or federal taxes.

This works okay for a couple of employees, but more than that it would simply be less expensive to pay >i use bank of america easypay. only real reason why is that it's free

Screw your simple challenge.

Each employee's time has to be allocated to a job or overhead and they have more than one office which has to be class tracked. Just to make it interesting, the offices are in different states.

Feel up to it Allan?

Before I reconcile my checking account, I make a deposit in the amount of the "uncleared" payroll checks. Then, after reconciling, I delete this deposit.