Handling payroll in an organization is the most crucial task. As a result, most enterprises trust software solutions for handling the same. Even then, there are a few employers who think that it is better to outsource the process to a third-party so that they can focus on the other aspects of the business.
There are so many aspects that a business owner has to look after. Payroll being one of the most significant of all of them needs extreme care and attention while being handled. Sometimes, organizations do not want to take any risk and approach third-party entities to tackle the same on their behalf.
Why Enter Outsourced Payroll in QuickBooks?
No matter how effectively a third-party service provider tackles the payroll on behalf of you for your staff and employees, as an organization, you need to keep your database updated for ready records. Thus, when the outsourced payroll is processed, it becomes important for you to enter the details in QuickBooks for future reference.
Entering Outsourced Payroll in QuickBooks: Steps to Follow
Step I: Creating manual tracking accounts if you have not already created them yet
- Select the account type as Expense and create payroll expenses:
- Choose the account type as Liabilities and create payroll liabilities:
- Federal Taxes (941/944)
- Federal Unemployment (940)
- [State] SUI/ETT
- [State] PIT/SDI
[You might add expenses and liabilities account based on your locality rules and regulations.]
Step II: Enter the payroll paychecks details
- From your payroll service, find out the payroll stubs or payroll report for your employees
- Choose +New
- Click on Journal Entry
- Enter paycheck date under the journal date
- To track the paycheck number, you can enter the same in the field named Journal no.
You can either keep all the paycheck total for the employees under one journal entry or you can have separate entries for each employee for retrieving breakout details.
- For adding gross wages or payroll taxes for employees, you can select Payroll Expenses: Wages or Payroll Expenses: Taxes respectively and enter the amount as a debit.
- For adding liabilities for the employees, you can select the respective payroll liability option as per Step 1 (iii) and enter the amount as credit.
- When you are done identifying the debits and credits, choose Save.
Though the steps are easy to follow, there are chances of users to face an issue if they are doing it for the first time. In case you get stuck at any of the above steps while following the instructions, you can chat with our QuickBooks experts available 24/7 for guidance.
Why even hire an outsourcing entity for payroll handling?
As business owners, you might have so many processes to look after. Outsourcing payroll functions is a blessing for you.
Why updating the QB is necessary?
To keep the records ready for your future reference.