Welcome to the Community, encorecleaning.
If you're doing payroll runs outside of QuickBooks, you'll still need to keep track of those paychecks in your books. Intuit refers to paychecks made outside of QuickBooks, with services like ADP or Paychex, as third-party paychecks.
Some payroll services will provide options to import paycheck data directly into your books. In the event your provider doesn't have this feature, you can manually track these payments as journal entries. This will keep the payroll and account records all in one place.
Manually entering payroll paychecks into QuickBooks tracks your payment totals; however, it doesn't create the data you'll need for your employee's W-2s. Be sure to work with the payroll provider you're using to get your year-end forms.
Also keep in mind that journal entries require an understanding of debits and credits. If you're unsure of what you should be entering, or have specific questions about the Chart of Accounts, I'd recommend working with an accounting professional.
Initially, you'll need to create your manual tracking accounts if you haven't yet.
Crease these expense accounts, selecting Expense as their Account Type:
- Payroll Expenses: Taxes
- Payroll Expenses: Wages
Create these liability accounts, selecting Liabilities as their Account Type:
- Payroll Liabilities: [State] SUI/ETT
- Payroll Liabilities: [State] PIT/SDI
- Payroll Liabilities: Federal Taxes (941/944)
- Payroll Liabilities: Federal Unemployment (940)
These accounts cover most common payroll tax situations. You may also need to create additional accounts for taxes specific to your state or locality.
Next, you can begin entering paychecks as journal entries.
If there's any additional questions, I'm just a post away. Have an awesome Thursday!
