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The chart of accounts in Payroll preferences does not match my full chart of accounts.

I have not run my first payroll yet but have subscribed to the QuickBooks payroll feature.  However, I have some conerns.  First, inside the Payroll preferences, I am trying to see if running a payroll through Quickbooks is going to affect my chart of accounts correctly or not.  The first problem I see is that the Wage Account is set to "Cost of Goods Sold".  However, I already account for wages through a detailed labor distribution spreadsheet and then make a monthly journal entry that debits the liability Accrued Payroll and credits to several labor expense accounts (Direct Labor, Indirect Labor, Vacation Pay, etc).  I do it that way in order to comply with US Federal Contractor auditing requirements. 

So my question is how to alter the payroll account settings to credit my Accrued Payroll rather than add in labor expenses that were already recognized through my previous journal entry?  It doesn't present me my entire chart of accounts, and some account names that it shows there are not even in my own chart of accounts.  Is QuickBooks Payroll not appropriate for my situation?


Thanks!

Best answer 12-10-2018 07:23 PM

Accepted Solutions
Established Community Backer ***

"However, I already account for wages through a detailed...

"However, I already account for wages through a detailed labor distribution spreadsheet and then make a monthly journal entry"

You cannot use Two Methods for the same data. Using a Payroll tool not linked to QB means that the calculations there would be used for your manual method. Otherwise, you would not make you own entries while using a System that also will make entries.

I recommend this article:

QB payroll I want to do it myself


7 Comments
Established Community Backer ***

"However, I already account for wages through a detailed...

"However, I already account for wages through a detailed labor distribution spreadsheet and then make a monthly journal entry"

You cannot use Two Methods for the same data. Using a Payroll tool not linked to QB means that the calculations there would be used for your manual method. Otherwise, you would not make you own entries while using a System that also will make entries.

I recommend this article:

QB payroll I want to do it myself


Frequent Explorer *

Thanks for the quick reply!  In conclusion, I will unsubs...

Thanks for the quick reply!  In conclusion, I will unsubscribe from the QB payroll feature.
Established Community Backer **

If you are using QuickBooks Mac desktop version you can s...

If you are using QuickBooks Mac desktop version you can subscribe to the Intuit Online Payroll.  Just make sure you access it through Employees->Payroll menu inside of QuickBooks Mac.  If you do that it will upload your chart of accounts to Payroll.  Then you can go into Payroll Preferences (within Intuit Online Payroll) and map the accounts however you like.
Frequent Explorer *

I assume you mean Workers->Payroll?  Is Intuit Online Pay...

I assume you mean Workers->Payroll?  Is Intuit Online Payroll different from the payroll within Quickbooks?    I am already subscribed to the payroll feature within Quickbooks.

I am not seeing any difference in the payroll preferences between the Mac and online versions of quickbooks.
Established Community Backer **

It depends on which version of QuickBooks you are using I...

It depends on which version of QuickBooks you are using If you are using QuickBooks Online (whether via the "mac app" or not) then ignore my comments which apply only to the desktop product.
Established Community Backer ***

I'd like to put this into perspective here: "If you are u...

I'd like to put this into perspective here: "If you are using QuickBooks Mac desktop version you can subscribe to the Intuit Online Payroll"

It is unusual to accrue payroll as expense in the US, but, for example, I have governmental entity clients that do this for the final month of the year. That means we Reverse that for the first date of the new fiscal year. Now that also means all payroll cycles are Regular Expense events.

Accruing it all the time, then running payroll without reversing your JE, means you would need the payroll service the allow you to link Not to expense, but to Liability for Gross Wages. And, if you already accrued Tax Liability, then the payroll cycle would also accrue payroll liabilities, that is problematic.

So, you can accrue everything and then Pay out the takehome, which really violates the Cash Basis handling and reporting for US Payroll.

Or, you can Reverse your own entry each cycle there will be a "real" payroll. However, that means you are doing the work twice. A "spreadsheet" for allocation is a separate system. Any time you intend to use Multiple Systems, instead of "just QB" then you will run into issues.


Established Community Backer **

I just focused on IOP not showing the correct chart of ac...

I just focused on IOP not showing the correct chart of accounts. Sorry - didn't look at the rest about a separate system.