Should I accrue wages and how would it affect the payroll remittance?

Hello @Kathy54 ,

A wages payable accrual in your case should be quite simple.  Basically you would wait until you ran your payroll on the 7th of the month (April 7, for example).  You know that the entire payroll entry is for the previous month (March).  So you would take all the applicable expense entries from the Apr 7 payroll, i.e. Wages, Vac Exp, Company CPP & EI Expense, and any other pertinent expense to the company, and make a journal entry posting those amounts, dated Mar 31.  This captures all your actual payroll expenses for the month of March.

On Apr 1, that JE should be reversed.  So now you have the actual payroll entries dated Apr 7 and the reversal of the March wage accrual dated Apr 1.  It is a wash.  There will be no payroll expenses recorded until the following month, which you will take from the May 7 payroll and create the Apr 30 wage accrual.  It usually takes at least a couple of weeks to finalize a previous month's records anyways, so that is why I suggest waiting until you run the actual payroll to do your entry for the previous month.  This way it will be exact; no estimating those difficult CPP and EI amounts, etc.

It should be noted that because you are posting directly to the CPP and EI expense account in the wages payable JE, that your actual payroll liabliity for the period will not be affected.  QBO payroll remittances only pick up the amounts that are generated through the payroll module.  So your liability amounts to CRA will be intact from the actual payroll you ran on Apr 7 and that payment will not be due until May 15 (if you are a monthly remitter).

The net affect of all these entries are as follows:

Hope this helps somewhat.  Good luck!

Thank you so much Rochelley for the clear and detailed answer! I really appreciate it!

The premise is absolutely correct, but the how has been complicated at least on the Enterprise Version.   We use multiple Wage, Tax, and Benefits account and multiple classes.  We are moving to QB Online.   We pay one time per month on the 5th for prior month.  Is there a simple way to download the expenses by GL account and class and upload as an accrual?  The download takes considerable manipulation at present?

Hi there WPBGCC,

Congrats on making the move to QuickBooks Online from QuickBooks Enterprise. Being able to work on your books from anywhere as long as you have an internet connection, will be a game changer! It sounds like you want to be able to export the General Ledger report, manipulate it, then import it again as an accrual into QBO. I'm happy to point you in the right direction.

Exporting your reports from QBO is a simple process. You can either access the report directly and use the small icon with an arrow to export it to Excel, or you can follow the steps below:

1. Navigate to the Gear icon, then select Export Data.
2. From the Reports tab, set the date range.
3. Add or remove items by toggling the switches.
4. Select Export to Excel. 

Here are some great documents that go over this process in detail:

• Export reports, lists, and other data from QuickBooks Online

• Export your reports to Excel from QuickBooks Online

Once you've manipulated the data, depending on how you want to import it again, you'll have a couple options. To see what you can import into QBO navigate to the Gear icon, then select Import data. Reports cannot be imported directly as they pull data from the transactions that you enter into the program, but if you're looking to import journal entries to represent the accrual, then you do have that option. Here's how to Import journal entries in QuickBooks Online.

For more information on how best to record and track your wages, taxes, and benefits outside of the Payroll module, I recommend consulting with an accountant. If you're working with one already, invite them to work on your QuickBooks account with you by navigating to the My Accountant tab from the left. Enter their email, hit Invite, and once they've accepted they'll be able to help you manage your business' books. If you're not yet working with an accountant, use the Find a pro to help button from the same page to navigate through our database of QuickBooks-certified accountants that can help you to best record these entries in your books.

I want to encourage other users and accountants to weigh in on this post if they have further insight or experience. The more contribution the better - that's what makes the Community so great! Enjoy your day.

Hello @WPBGCC ,

I don't know if there is an easy way to automate this.  I also have multiple wage accounts and classes and I find the easiest way to do this is to have a saved/memorized journal entry that has all of my accounts and classes saved.  I simply pull a regular payroll report for the payroll in question, and populate the amounts in the journal entry dated the end of the previous month.  Then click on the "Reverse" to create the reversal, which should automatically date the to the 1st of the current month.  The whole exercise takes less than 5 minutes.  Please see below for the JE that I use monthly to record the Wages Payable.

Hope it helps.

Rochelley