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Level 1

Payroll Item vs Service ITem

In my 'Payroll Items List' hourly wage is tied to GL 52000.

In my 'Service Items List' different services are coded to different GL accounts

 

However, it seems that the payroll follows the 'Payroll Items' coding, even though in the timesheet, I am using the correct service item.

 

How do I correct this so that I can properly classify different types of work?

8 Comments
QuickBooks Team

Payroll Item vs Service ITem

Consider me a detective on the case of that GL accounts, @WG3.

 

You can go to the Payroll Item List to correct your payroll item's account. Let me walk you through the steps.

 

  1. Go to Lists, then Payroll Item List.
  2. Double-click your Hourly item, then Next.
  3. Under Expense account, choose the correct GL account you want to use (see image below).
  4. Click Finish.

 

 

With these steps, you're able to properly classify your types of works. You can learn more about editing payroll items at this link here: Edit a payroll item.

 

We also have a guide on how to adjust payroll liabilities in QuickBooks Desktop that I'm sure you'll find helpful. It has details on how you can fix incorrect payroll liabilities.

 

That's all there is to it. Let me know if you have other questions or concerns. I'm always here to lend a hand. Thanks for joining us today and I wish you have a wonderful rest of the week.

Level 1

Payroll Item vs Service ITem

This does not answer my question.  I have the payroll item setup. Let me try to rephrase. The payroll item is called hourly wage and gets coded to expense account 5200. But here is where I have an issue. When I setup Service Items, I am also required to enter a GL code. So far this example:

Employee A, has 10 hours coded to Hourly Wage, Service Item Repairs.

Employee B, has 10 hours coded to Hourly Wage, Service Item Warranty.

 

Because they are both hourly EE's they have the same Payroll Item Code, but they do different tasks, and so have different Service Items. The problem is that both EE's costs are posting to the same GL code based on the PR Item, instead of based on the service item.  How do I correct this?

QuickBooks Team

Payroll Item vs Service ITem

Thank you for getting back to us, @WG3.

 

Allow me to provide additional information about the payroll item and service item used for payroll.

 

When you use service items for payroll, the expense account associated with it won't be applicable for any payroll transactions. Thus, payroll expenses will always follow the expense account of the payroll item.

 

To correct this, you can utilize our class tracking feature in QuickBooks Desktop. This way, it'll identify your payroll transactions, whether it's for Hourly wage for Repairs or Hourly wage for Warranty. Here's how:

 

  1. Go to the Lists menu, then select Class List.
  2. From the Class drop-down menu, select New.
  3. Enter the class name.
  4. Click OK.

I'm adding this article for more guidance: Set up and use class tracking in QuickBooks Desktop.

 

Or you can also create different payroll items for each hourly wage. This way, it'll directly report to your associated expense account.

 

Just in case you want to set up and manage payroll schedules, here's an article you can read for more details: Set up and manage payroll schedules.

 

Keep in touch if you need any more assistance with this, or there's something else I can do for you. I've got your back. Have a good day.

Level 1

Payroll Item vs Service ITem

Thank you Mark, but now I have another question. I prefer to setup multiple payroll items, as the goal is to see separate lines of business on the profit & loss statement. If I setup Hourly Wage Repair and Hourly Wage Warranty...how will this affect the timesheet calculation.  Currently, if an EE goes into overtime in Hourly Wage, Quickbooks will automatically calculate OT when processing payroll.  Will using multiple hourly wage codes cause a problem in the next steps of payroll calculations?

QuickBooks Team

Payroll Item vs Service ITem

I can shed a light on that, WG3.

 

The mapping of the payroll item and service item doesn't impact the timesheet calculation. It will only affect your reports. Once you set it up, you'll notice that it will be separated in your reports if you're using different expense accounts. Additionally, it will show as individual lines in your Profit and Loss report.

 

When you create a paycheck for an employee and enter the hours worked, overtime, or double overtime hours at each rate, the program will automatically perform the calculations for you.

 

Some companies pay hourly employees different rates for different types of work. Utilizing multiple hourly wage items won't cause any problem as long as the setup of the payroll item and the number of hours entered in the timesheet are correct. Feel free to read this article to learn how to add new payroll item automatically when you create paychecks: Set up an hourly wage payroll item.

 

If you need to track where your business stands in terms of employee expenses, you can customize payroll and employee reports.

 

As always, I'm just a post away if you have any other concerns or follow-up questions. Have a great rest of the day.

Level 1

Payroll Item vs Service ITem

I am having the same problem and this thread doesn't quite get to what I need (or perhaps it does and I am not understanding it).  

 

When an employee enters time, both a payroll item and service item exist, yet the time is getting booked, from an accounting perspective, to the GL expense associated with the payroll item, not the service item.  Is there a way to switch this around such that the time gets booked to the the GL expense account associated with the service item?

 

Thank you

Level 1

Payroll Item vs Service ITem

I am having the same problem and this thread doesn't quite get to what I need (or perhaps it does and I am not understanding it).  

 

When an employee enters time, both a payroll item and service item exist, yet the time is getting booked, from an accounting perspective, to the GL expense associated with the payroll item, not the service item.  Is there a way to switch this around such that the time gets booked to the the GL expense account associated with the service item?

 

Thank you

QuickBooks Team

Payroll Item vs Service ITem

Thanks for sharing the details with us, @ghepp.

 

I’m here to share some insights about the expense accounts used in your service item and payroll item.

 

Timesheet is a non-posting transaction. Thus, QuickBooks Desktop (QBDT) doesn’t generate expense in your service item expense account. The Timesheet will only book the employee’s hours in your payroll.

 

Thus, when your employees enter their time, QBDT will generate the expense account associated with your payroll item. The expense account link with your service item will be generated if you use the item in creating a Bill or Expenses.

 

Furthermore, I got you here some articles that you can utilize on managing your Timesheets and item tracking in QBDT:

I’ll be around if you have any other follow-up questions. Leave a reply in this thread and I sprint back into action. Keep safe!

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