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Level 1

Payroll, Funds Transfer & Expenses

This is complicated to explain, so stay with me...

We use Quickbooks, where Profit & Loss statement is a crucial budget item.

We have a general bank account, and a payroll bank account.

In the past, payroll was manually calculated. When cutting payroll checks, each department was itemized so that expenses in the P&L were correctly account for. (For example, how much went to Adminstration, Police, Fire, etc.)

Now, we use ADP. It tells us the amount we need to cover payroll. Everyone is on Direct Deposit, so we would like to do a Funds Transfer from the General Bank account to the Payroll Bank account for immediate availability. However, we can't find a way to itemize the transfer! Therefore, the P&L is incorrect. We have to physcially write a check through quickbooks from our general fund to our payroll account, itemize through the program, and then physically deposit it into the payroll account and wait for it to clear in order to itemize departments for the P&L statement. There HAS TO be a better way.

If this makes sense when reading it -- it's hard to explain, by makes sense when looking at it -- can you offer any tips and tricks to use the ease of the immediate funds transfer, yet still keep the reporting accuracy within Quickbooks?? Thank you in advance!

2 Comments 2
QuickBooks Team

Payroll, Funds Transfer & Expenses

I'm all eyes and ears for you, cityemployee.


Thanks for providing on-point explanation on how you process payroll in QuickBooks Desktop. I'm here to share my insights about your manner of transferring funds and other information about it. 


QuickBooks Desktop has flexible ways on how you can track your transactions. There are four methods to transfer money between two accounts; these are Transfer, Check, Imported Bank Transactions, and Journal Entry


The Transfer Funds Between Accounts feature is a more general process. It only has six different fields, namely Date, Class, Transfer Funds FromTransfer Funds To, Transfer Amount, and Memo


At this time, the option to itemize your funds from that section is unavailable. You need to use a check to make sure the money is allocated correctly between those departments. I must say, you're already doing the correct process of transferring your funds from the General Bank Account to the Payroll Bank Account.


We are always working to improve the features available in QuickBooks Desktop, and your feedback can greatly contribute to it. Please let our product developers know about your suggestions with the Transfer Funds Between Accounts functionality by going to the Help menu and selecting Send Feedback Online


Any suggestion is welcome. The more we get, the more rounded product QuickBooks Desktop will become! Feel free to comment below if you have additional questions. I'll be around!

Level 15

Payroll, Funds Transfer & Expenses

Do not Itemize the transfer; this is not the Payroll Spending event. This is Moving our own money from one place to another. Then, you Spend it from there, with the details.


Do you have QB Premier? QB Pro is not good enough for you, because it does not manage Balance Sheet by Class.


Your Payroll is best entered as "checks" from the Payroll Bank, so that Class Tracking works. Don't try to do this in one JE, because you end up with out of balance Class reporting.


I recommend the book Running QB for NonProfits, by Kathy Ivens. These are the same tools you need to be using. I have had Tons of towns and special purpose districts and schools as my clients for QB; I got referrals from the State Dept of Commerce for helping the clerks, for purposes of preparing CAFR, etc. I also recommend QB Accountant Edition.

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