Breaking down payroll by department

seong · ‎May 28, 2019

Currently running a profit and loss standard report clumps all payroll into one "payroll expenses" account.

Is it possible to have it categorized into separate account based on department?

I looked at payroll item but that means that I would have to have

payroll item:hourly

coa: payroll:service center

payroll item:hourly

coa: payroll:office

Rochelley · ‎May 28, 2019

Your best option to separate payroll into departments is to use the 'Class' feature. You would create a class for each department and then apply that Class to each person's payroll profile in the 'Payroll Info' tab. Your standard P & L would still show your payroll expenses as a lump sum in one GL account, but you could create sub-reports showing the breakdowns by Department/Class. There are quite a few different reports you could use, but it all depends on your preferences for how you'd like the information to display. Whichever report you choose to use, just filter by Class and you will get the information you're looking for.

It is also possible to set up different GL accounts for each department, but there are a few extra steps to get proper financial reporting, simply because for the built-in Vacation Accrued, Vacation Used, Bank Time accrued & used (if you use it) and CPP & EI items, QB only allows one Payroll Item for each, and they are default and are linked to only one GL expense account each. So the salaries and/or hourly wages would all go into the correct GL accounts because you would have separate Payroll Items for each department, but, for example, Vacation Expense would only go to one GL account. You would have to choose one account for the items mentioned previously, and then do GJE's at the end of each month to move those amounts into your desired GL accounts for each department. I do this every month and it is very simple, because I have created memorized reports showing Vacation Expense, Bank Time, CPP & EI for each class. I create my JE's from these reports by crediting the expense acct that they are currently posting to, and debiting the GL account I want. I just print my reports each month, and the corresponding JE's I make to move the expenses to the correct accounts. It really sounds more difficult than it is. If you require any further help with this, please let me know and I can walk you through it.

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LauraAB · ‎May 28, 2019

Hi seong,

Thanks for the details of what you're looking for. I can see how having insight into how each department is contributing to your payroll expenses would be great for keeping track of your expenses overall.

The Profit and Loss report will always show a breakdown by account, so what you've outlined for setting up a payroll item and related expense account in the chart of accounts would work in theory. However, I strongly recommend touching base with an accountant to learn what it might mean for tracking your payroll amounts. Like with all finances, getting these details right is essential to properly managing your books.

Another way to keep track of different departments in QuickBooks Desktop is using class tracking. Class can be assigned to employees or certain payroll items, and there are reports such as the Payroll Summary report that you can add a class filter to see the amounts you need. Comparing the results you see in the payroll reports to the figure in the payroll expenses account on the Profit and Loss can give you an idea of the breakdown for your numbers.

Intuit's Find a ProAdvisor tool can help you connect with an accountant familiar with QuickBooks Desktop, so it's a win-win for you. You'll get the accounting expertise as well as someone who has insight into how the program functions. Simply click the link I just gave and type in your postal code to begin your search. On the results page, you can filter for closer proximity and which version of QuickBooks you're using.

To try out these potential solutions without affecting your company file, I suggest opening a Sample company file and playing with the built-in mock data to see what you can produce. To exit out of your own company file and open a Sample one, follow these steps.

Click File from the top menu bar.
Click Close Company.
On the No Company Open screen, choose Open a sample file.
Choose one of the sample files and click it to open.

When you want to go back to your company file, just follow the first few steps again and then choose your file from the No Company Open screen.

Learn more about class tracking by following the steps below.

Click Help from the top menu bar.
Choose QuickBooks Desktop Help (or skip Step 1 and press F1 on your keyboard to bring up the screen).
Click the Help tab.
Click Search to bring up the search bar.
Use keywords to find related articles.

Feel free to give our phone support team a call if you have any technical support questions. They're available at 1-877-772-9158. Pro and Premier agents are there for you 24/7 and Enterprise support has your back from Monday to Friday between 9 a.m. and 8 p.m. EST.

Have a great day!

Rochelley · ‎May 28, 2019

Your best option to separate payroll into departments is to use the 'Class' feature. You would create a class for each department and then apply that Class to each person's payroll profile in the 'Payroll Info' tab. Your standard P & L would still show your payroll expenses as a lump sum in one GL account, but you could create sub-reports showing the breakdowns by Department/Class. There are quite a few different reports you could use, but it all depends on your preferences for how you'd like the information to display. Whichever report you choose to use, just filter by Class and you will get the information you're looking for.

It is also possible to set up different GL accounts for each department, but there are a few extra steps to get proper financial reporting, simply because for the built-in Vacation Accrued, Vacation Used, Bank Time accrued & used (if you use it) and CPP & EI items, QB only allows one Payroll Item for each, and they are default and are linked to only one GL expense account each. So the salaries and/or hourly wages would all go into the correct GL accounts because you would have separate Payroll Items for each department, but, for example, Vacation Expense would only go to one GL account. You would have to choose one account for the items mentioned previously, and then do GJE's at the end of each month to move those amounts into your desired GL accounts for each department. I do this every month and it is very simple, because I have created memorized reports showing Vacation Expense, Bank Time, CPP & EI for each class. I create my JE's from these reports by crediting the expense acct that they are currently posting to, and debiting the GL account I want. I just print my reports each month, and the corresponding JE's I make to move the expenses to the correct accounts. It really sounds more difficult than it is. If you require any further help with this, please let me know and I can walk you through it.

Rochelley · ‎May 28, 2019

Hello @seong ,

I forgot to mention that if you begin Class tracking by department, then you can run a Profit & Loss by Class Report which will separate all of your income and expenses.

If you don't classify every single transaction, however, there will be a lot of figures ending up in the Unclassified column. For that reason, if you are simply wanting to see your payroll expenses broken out by department, then you could filter the report to only show the accounts that are affected by payroll.

wiasinc3 · ‎August 15, 2019

Why would one of my employees not show up on a payroll summary by class?

Rochelley · ‎August 15, 2019

First, I would check that all employee names are selected in the report filter. Then make sure the employee is not marked as inactive. Then check that the employee is assigned to a class in his/her individual payroll details page. If not, they would not show up in a class report at all.

I can't think of many other reasons why you wouldn't see an employee on your report, but if I think of something I'll let you know.

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