Problem with Balance Sheet

Hi Noel, thanks for posting on the Community

The opening balance is the starting point for accounts in QuickBooks. When migrating, the ending balance in your previous software will usually be entered via a journal for the opening balances in QB.

Our guide here shows how to enter and manage these balances. We recommend working alongside your bookkeeper or accountant to ensure the records are accurate.

Recording the wages to an expense account on the journal and on the individual bank entries would be duplicating the record.

In QuickBooks Online Payroll, the automated journal would credit the wages to a payroll PAYE liability account. and debit to a payroll wages expense account. 

Individual employee wages would then be recorded using an expense (+ New > Expense), with the payroll liability account selected in the Category field. Once saved, this reduced the amount owing in the liability account, and can be matched to the downloaded bank payment. 

HI,

thank you for your quick response, just so that I am a bit confused regarding the  recording of the wages

 "the automated journal would credit the wages to a payroll PAYE liability account. and debit to a payroll wages expense account." 

Question: is the PAYE Liability account automatically created by QB?  I am assuming the Wages expense account is the one i created called "Wages Expense"?

I record the individual wages as an Expense and categorise them in "Wages Expense" My undertanding is that categorising them to "Wages Expense" is the wrong category and it should be the PAYE Liability report, is this correct?

Best Regards,

Noel

Hi Noel, QuickBooks automatically creates a payroll liability account when the payroll is activated. We offer two different versions of payroll (Standard and Advanced) and the accounts used differ slightly for each. If you don't use the payroll module in QuickBooks, you won't have the default payroll accounts but you can create your own. 

You don't need to create a payroll liability account; however, if you're recording the wage expense on the journal, you would need to match this to the individual payments in your bank (create a separate line on the journal for each employee) instead of adding this as this would cause duplication. Hope this helps!

Thank you for your reply, I am still confused, we do not use QB Payroll, I create a journal and include a separate line for each employee in the journal, this is saved to "Wages Expense" as is the individual payments from the bank.

How do I match to the journal entries? and should both the journal and individual payment go into "Wages Expense"?

Thank you for your patience

Best Regards,

Noel

Hi Noel, if the date of the journal and the line amount (per employee) on the journal matches the payment in the bank you should see an automated Match on the For review bank feed. If you don't, you can still search for a match by clicking on the payment in the for review feed to expand > click Find match.

If you're unable to match, you can exclude the transaction(s) from your bank feed as the expense has already been recorded to the Wages Expense account on the journal. 

Please get back to us below if you have any further queries on this!

Hi,

thank you for your reply, that makes perfect sense, I will try that on Monday. I am just wondering that if I exclude the entries will this cause a problem at the end of the month when reconciling or will the reconcile feed pick up the items in the journal?

Thank You

Noel

Thank you for coming back to us, Noel!

If you exclude transactions that are still in the For Review tab on the Banking page, they won't affect your records because they haven't been added to QuickBooks yet. 

On the other hand, if you undo the accepted (categorized) transactions and exclude them, it will certainly affect your reports. This can create issues with reconciliation if you're excluding the correct transactions. However, if you're only excluding duplicates, then you should be fine.

My recommendation is always check your transactions in your bank register against your monthly statements.

Yes, that was my question, when the individual wages come into the bank feed (for Review tab) and I exclude them because they have already been categorised in the journal, then my understanding is because I have excluded them when I go to reconcile my reconciliation will not balance as I have excluded the wage entries, is this correct? (They will appear in the bank statement but not in QB because I have excluded them)

or alternatively, when I run the reconciliation will QB pick up the wages from the journal?

if not, then would a solution be to remove the wage entries from the journal?

Thank You,

Noel 

I understand the challenges you're facing with your Balance Sheet after importing data into QuickBooks Online (QBO), Noel. I'm here to share insights about this. 

From your description, it appears that you have utilized a journal entry to record your transactions. In order to match these transactions, it is important to ensure that they have the same date and amount. If a transaction creates a duplicate in QuickBooks Online (QBO), you have the option to exclude it.

You mentioned that the journal entry has already been categorized. Does this mean that you have already matched these transactions to your previously downloaded transactions? If that is the case, then it is possible to exclude the duplicate transactions from the review tab.

Excluding the transactions does not imply that they will not match. If your bank balance and QB balance are the same during reconciliation, then you are good to proceed. After running the reconciliation, all transactions you have created in QB and categorized transactions from the banking page will be visible in the reconciliation window.

I suggest consulting your accountant. They can provide you with the correct information to ensure that your recordings are accurate.

Keep your posts coming if you need further assistance. I'm always here to help. Have a great day!

Hi,

thank you for your detailed explanations and your patience I will be back in work on Monday and will work on your suggestions.

Best Regards,

Noel