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Payroll check not cashed, employee paid with cash instead

An employee was unable to cash her paycheck for some reason and needed the money ASAP so the business owner took back her paycheck and paid her with cash from cash on hand/change in drawer. What is the best way to document this and still retain the withholding information? Thank you!

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Best answer February 06, 2018

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Content Leader

Payroll check not cashed, employee paid with cash instead

Hello aveda,

 

Thanks for joining us here in the Community. I'm glad to help get this payroll issue straightened out.

 

Here's a few steps to get this accounted for correctly:

 

1. Click the Workers tab in the left navigation bar.

2. Make sure Employees is selected at the top of the page, select the blue link for Paycheck list on the right side of the page.

3. For the check in question, change the number to say "CASH."

 

Next, you'll need to create a bank transfer within your QuickBooks account to move money from Cash on Hand to your bank account. To do this you'd:

 

1. Click the Create icon (+) in the top right corner.

2. Select Transfer.

3. Transfer Funds From: Petty Cash/Cash on Hand to.

4. Transfer Funds To: desired bank account.

5. Click Save and close.

 

This article contains a similar question and answers: https://community.intuit.com/questions/1662497-employee-could-not-cash-payroll-check-issue-at-bank-r....

 

This information will get you back on track. I wish you continued success. Please let me know if there's anything else I can help with.

 

View solution in original post

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Highlighted
Content Leader

Payroll check not cashed, employee paid with cash instead

Hello aveda,

 

Thanks for joining us here in the Community. I'm glad to help get this payroll issue straightened out.

 

Here's a few steps to get this accounted for correctly:

 

1. Click the Workers tab in the left navigation bar.

2. Make sure Employees is selected at the top of the page, select the blue link for Paycheck list on the right side of the page.

3. For the check in question, change the number to say "CASH."

 

Next, you'll need to create a bank transfer within your QuickBooks account to move money from Cash on Hand to your bank account. To do this you'd:

 

1. Click the Create icon (+) in the top right corner.

2. Select Transfer.

3. Transfer Funds From: Petty Cash/Cash on Hand to.

4. Transfer Funds To: desired bank account.

5. Click Save and close.

 

This article contains a similar question and answers: https://community.intuit.com/questions/1662497-employee-could-not-cash-payroll-check-issue-at-bank-r....

 

This information will get you back on track. I wish you continued success. Please let me know if there's anything else I can help with.

 

View solution in original post

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Level 1

Payroll check not cashed, employee paid with cash instead

Hi Morgan and thanks so much for your answer. I have tried this and when I try to change the check # to CASH it wiil not accept it. I get a popup box that says it must be a positive number only with no letters, decimals, or negative numbers. It also will not let me change the form or payment from bank to cash on hand. Is there a way to override it so that I can change the check # to CASH? If not, should I void or delete the original check and create another payment from CASH? Thank you!



wrote:

Hello LaPat,

 

Thanks for joining us here in the Community. I'm glad to help get this payroll issue straightened out.

 

Here's a few steps to get this accounted for correctly:

 

1. Click the Workers tab in the left navigation bar.

2. Make sure Employees is selected at the top of the page, select the blue link for Paycheck list on the right side of the page.

3. For the check in question, change the number to say "CASH."

 

Next, you'll need to create a bank transfer within your QuickBooks account to move money from Cash on Hand to your bank account. To do this you'd:

 

1. Click the Create icon (+) in the top right corner.

2. Select Transfer.

3. Transfer Funds From: Petty Cash/Cash on Hand to.

4. Transfer Funds To: desired bank account.

5. Click Save and close.

 

This article contains a similar question and answers: https://community.intuit.com/questions/1662497-employee-could-not-cash-payroll-check-issue-at-bank-r....

 

This information will get you back on track. I wish you continued success. Please let me know if there's anything else I can help with.

 


 

Highlighted
Content Leader

Payroll check not cashed, employee paid with cash instead

Hey aveda,

 

Thanks for trying that out for me. Yes, I recommend voiding the original payroll check.

 

There's more than one way to get this done. An alternative method to account for paying your employee outside of the regular payroll cycle is to create a cash only bonus. Here's some steps to set this up:

 

1. Click the Workers tab from the left navigation menu. Make sure Employees is selected at the top of the page.
2. In the upper left, choose the Run payroll drop-down and select Bonus only.
3. Select the applicable settings for the bonus check, then click Continue.
4. Choose the desired employee, then enter the amount.
5. At the bottom, click the small icon beside Payroll options.
6. Select the payroll option, then click Apply.
7. Choose preview and submit payroll.
8. If you select As net pay, the pay-stub will list Employee Taxes Paid by Employer under the pay section.

 

 

I'm around if you have any other questions.

 

 

 

 

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Level 1

Payroll check not cashed, employee paid with cash instead

Hi Morgan,

Thank you for these additional suggestions. But the matter got a little more complicated. I just came across a deposit slip on which the  business owner had substracted the amount of the paycheck she cashed for the employee from recent cash received for sales. She used that cash to replenish her cash on hand. So the deposit did not correctly reflect income from sales nor is there any entry to show that the cash on hand was reimbursed (or that it was used to pay the employee in the first place).

 

What I'm thinking I need to do about this now is to

1) delete or void the original and uncashed/undeposited paycheck to the employee

2) Rewrite the check but indicate that it was paid from cash on hand

3) Record an additional bank deposit of cash in the amount that was withheld from the recent deposit (the same amount that was paid to the employee in cash and the amount of the uncashed/undeposited check)

4) Record a bank transfer from the primary account to cash on hand to show reimbursement to that account for the amount of the check that was paid from it.

 

Would you agree with that or do you see a better way to document all this?

Thank you!

 

 


wrote:

Hey aveda,

 

Thanks for trying that out for me. Yes, I recommend voiding the original payroll check.

 

There's more than one way to get this done. An alternative method to account for paying your employee outside of the regular payroll cycle is to create a cash only bonus. Here's some steps to set this up:

 

1. Click the Workers tab from the left navigation menu. Make sure Employees is selected at the top of the page.
2. In the upper left, choose the Run payroll drop-down and select Bonus only.
3. Select the applicable settings for the bonus check, then click Continue.
4. Choose the desired employee, then enter the amount.
5. At the bottom, click the small icon beside Payroll options.
6. Select the payroll option, then click Apply.
7. Choose preview and submit payroll.
8. If you select As net pay, the pay-stub will list Employee Taxes Paid by Employer under the pay section.

 

 

I'm around if you have any other questions.

 

 

 

 



 

Highlighted
Content Leader

Payroll check not cashed, employee paid with cash instead

Hello aveda,

 

Thank you for providing those additional details, that clears things up a lot.

 

You're certainly on the right track:

 

"1) delete or void the original and uncashed/undeposited paycheck to the employee."

Yes. Delete the original paycheck.

 

"2) Rewrite the check but indicate that it was paid from cash on hand."

Yes to this one as well.

 

"3) Record an additional bank deposit of cash in the amount that was withheld from the recent deposit (the same amount that was paid to the employee in cash and the amount of the uncashed/undeposited check)"

Yes. Create a deposit for the additional amount that was withheld. If the original deposit slip is recorded in QBO, you'll need to delete it first and then complete steps 3 and 4.

 

"4) Record a bank transfer from the primary account to cash on hand to show reimbursement to that account for the amount of the check that was paid from it."

Yes here also. :)

 

Another option to consider would be to create a cash advance. I've got one more article for you that explains how this can be done: https://community.intuit.com/articles/1436941-create-employee-advances-and-repayments

 

You've got this. Please reach out to me if I can help with anything else.

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