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I have set up a company contribution for the employer paid benefit plan but have ran in to some issues when it automatically stuck this into a payroll liability. The Benefit plan is paid and added to a expense account when we receive the insurance bill. Now by using the employer contribution its created an additional liability.
Is there any way to fix this so that the contribution doesn't affect the accounts or do I have to adjust the insurance bill to pull from the liability account?
Thank you
Hi there GlynnPH,
Choosing the correct accounts is an important part of the bookkeeping process, especially when it comes to Payroll. It's crucial that you're able to select the appropriate accounts to have your Employee Deductions and Employer Contributions go to and come from. Let me give you a hand with this.
By navigating to the Gear icon, then choosing Payroll Settings, you can select Accounting. This'll bring you to a page that'll allow you to map your Payroll accounts. Once you've added your new Employer Contribution, you'll be able to scroll down until you find it on the list and use the blue arrow to access a dropdown menu of accounts. Choose the appropriate Expense account and hit OK.
This should remedy the issue you're running into. If you have more questions about how to map your Payroll accounts, consulting with your accountant is the best move. Invite them to QuickBooks by navigating to the My Accountant tab and using the invite field. If you don't hae an accountant just yet, you can use the Find a pro to help button to navigate through our database of QuickBooks-certified ProAdvisors to find one in your area to give you a hand.
I know you'll get this sorted in no time. Have a great day!
Thanks for the reply.
This solution isn't solving the problem of a the double entry, its just changing the account where the double entry is going.
Only a portion of the monthly insurance bill is a taxable benefit, so when I receive the insurance bill, I enter this as an debit to Employee Benefits Expense account and credit our chequing account for the payment.
Say $300 for the monthly bill ($150 in taxable benefits)
But in order to calculate and report the appropriate income for the employee's, I wanted to add the taxable potion onto their paycheque using the company contribution, but this is creating an additional entry in as a expense and liability. (debit expense, credit liability)
So now for a $300 bill I have the following entries:
debit $450 Employee Benefits expense
credit $300 for payment to insurance company
credit $150 liability which we don't actually owe to the insurance company
Is there something I need to do when entering the insurance bill to reconcile this liability? Or am I missing something?
Thanks!
Hi GlynnPH. Glad to hear from you again. It's vital you're able to record your transactions the right way in order to prevent discrepancies in your books. At this point, I highly suggest contacting an accounting professional for expert advice on this. I'll be happy to answer any other questions in the comments below. Feel free to reach out.
I'm seeing the exact same problem. It's almost like a double ding on the expense side. Would it just be better to not add the employer contribution amount to the payroll deduction?
Hi mburks. Thanks for joining this thread. Being able to correctly record your payroll information is essential in order to keep your books up to date. You can choose not to add the employer contribution amount to the payroll deduction and track it manually. However, it won't be added to the employee's paycheque. I recommend that you consult an accountant as they have the ability to explain how to record this entry to keep your books balanced. If you don't have an accountant, you can find an accountant near you by clicking on the My Accountant tab on the left navigation menu > and then Find a pro to help. Let me know if you have any questions, I'll be happy to help.
The company contribution records the expense and the vendor payment records the expense.
QB is handling the company contribution incorrectly. That is not an accounting problem, it is a software problem
If you record it here as an expense-you will duplicate the expense when you pay the vendor-does QB try these issues out?
No-if you choose an employee expense account then you pay the vendor with the employee expense account it is - yes- double counted.
Has anyone found a solution to this? Same issue.
I am facing the same issue!! QB needs to fix this!!
Still having this problem-this is crazy and QB just says ask an accountant
Please address the problem-not offer silly solutions.
Hi SharonH3,
Choosing the correct accounts is an important part of the bookkeeping process, especially when it comes to Payroll. It's crucial that you're able to select the appropriate accounts to have your Employee Deductions and Employer Contributions go to and come from. Let me give you a hand with this.
By navigating to the Gear icon, then choosing Payroll Settings, you can select Accounting. This'll bring you to a page that'll allow you to map your Payroll accounts. Once you've added your new Employer Contribution, you'll be able to scroll down until you find it on the list and use the blue arrow to access a dropdown menu of accounts. Choose the appropriate Expense account and hit OK.
If you have more questions about how to map your Payroll accounts, consulting with your accountant is the best move. Invite them to QuickBooks by navigating to the My Accountant tab and using the invite field. If you don't have an accountant just yet, you can use the Find a pro to help button to navigate through our database of QuickBooks-certified ProAdvisors to find one in your area to give you a hand.
If you have any other questions, please feel free to reach out.
Yes-understood-now take it one more step and go to pay the health insurer because you do record bill payments (or retirement investment provider) and tell me what happens-you double the expense!
Dare someone at QB to try-just take the next step in a normal work process.
Hello, I share the same concern. I'm wondering if you've found a solution? I'm considering recording a journal entry to address the issue. My idea is to debit Payroll - Health Liability and credit Payroll - Health Expense. The reason for this adjustment is that both the expense and liability accounts appear to be overstated. The expense account is likely overstated because QBO has already recorded health benefits as an expense. When we receive the bill from the vendor and book it as an expense, it results in further overstatement. As for the liability, since QBO doesn't actually pay the insurance, this account remains unresolved.
Yes- I have that too-the account remains unresolved and of course radio silence from QB once I asked them to follow through with the next step.
So you have an overstated liability on your books and no apparent way to get it off.
I hope QBO can shed light on this situation. Do you think creating a journal entry will resolve this issue? Dr. Health Benefit Liability Cr. Health Benefit Expense
THAT IS NOT THE QUESTION!!!!!!!!
DO YOU UNDERSTAND ACCOUNTING?
To fix this without creating a journal entry or extra steps:
Example: Company Contribution: Life and Disability
Create
1. Expense account: L&D Contra Account (I set mine 1 number off to clump together ex. 63330 & 63331
Setup on contribution payroll item:
Liability account (company paid): L&D contra account
Expense account (company paid): L&D Insurance (regular account normally expensed to)
As the item is double booked it immediately reverses to a contra expense account since it is assumed that in like NORMAL BOOKKEEPING it is recorded once a month at the time of the month and paid.
QUICKBOOKS DO BETTER
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