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Level 2

QB Desktop Payroll DD reclass

Hello,

We're using Quickbooks Desktop 2018. We recently transitioned from outsourced payroll to doing it ourselves. Previously, we would simply record checks when payroll was processed. We used a memorized transaction that broke down the payment amount by gross pay, FICA and W/H, W/B, 401K match, and Transit Tax (specific to our state). 

 

Since transitioning to Quickbooks and utilizing the direct deposit function, what is the best way to correct/ offset/ adjust  the automatic Quickbooks liability check that comes across? 

Solved
Best answer August 25, 2019

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Anonymous
Not applicable

QB Desktop Payroll DD reclass

The accounts used on your paychecks are a result of the payroll items' setup.  If wrong, then edit the items from the payroll item list and update the accounts. When you do, say yes to update the existing transactions and then they'll show up on your P&L.

View solution in original post

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Anonymous
Not applicable

QB Desktop Payroll DD reclass

RE: there is still no option to tie payroll items to classes to update the prior reports.

 

That's correct.  Updating the preference does not change your existing transactions.

 

In order to impact reports, you have to actually change the data by editing the paychecks and changing the classes you see there.

View solution in original post

15 Comments
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Anonymous
Not applicable

QB Desktop Payroll DD reclass

Depends. What do you want to correct/ offset/ adjust?  It should be correct.

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Level 2

QB Desktop Payroll DD reclass

The amount is correct, of course, but I still need to break it down into the accounts of gross pay, FICA and W/H, W/B, 401K match, and Transit Tax (specific to our state), versus the check that comes across hitting the Direct Deposit payroll item. 

 

If I go in under the expenses tab and do the breakdown of amounts to the appropriate accounts and classes, it does not recognize the amounts, only the total amount under Payroll Liabilities. 

 

Would you recommend doing a JE to move the amounts to the appropriate accounts?

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Anonymous
Not applicable

QB Desktop Payroll DD reclass

RE: "The amount is correct, of course, but I still need to break it down into the accounts of gross pay, FICA and W/H, W/B, 401K match, and Transit Tax (specific to our state), versus the check that comes across hitting the Direct Deposit payroll item. "

 

All that information is already on your QuickBooks paychecks.

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Level 2

QB Desktop Payroll DD reclass

I'm sorry, I should have been more specific. We take that information and break it down further, by assigning a percentage of each account to a class (we are a partnership and this is how we determine how many hours were worked by each employee per job, under which partner). 

 

So, for example, we have three separate amounts going to gross pay; one per each of our three classes. Likewise for the other taxes and 401K matching accounts. 

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Moderator

QB Desktop Payroll DD reclass

Hello there, @PeggyOliviaSmith.

 

Thank you for getting back with us and provide more details about your payroll concern. Allow me to help share some insight about tracking payroll using classes in QuickBooks.

 

The liability check contains the net amount of all direct deposit paychecks, as well as their corresponding fees. If you wish to assign a class per payroll item, you can edit the paycheck to add the information you want. 

 

Please take note that, you can only assign a class to each earnings items on a paycheck. To start, let's make sure to set preferences for tracking payroll using classes. You can select Earnings Item payroll preference so you can assign one class for each earnings item on a paycheck.

 

After that, you can edit each paycheck and assign a different class to each earnings item. The following article contains the step-by-step process, as well as how to add the class and to identify how payroll expenses are distributed to each class: Tracking payroll expenses by class, department, or location.

 

Additionally, to track Addition, Deduction and Company Contribution items, you need to select the Track Expenses By Job in the settings. This way, in your reports, items are divided based on the division of the earnings items on the paycheck. 

 

Here's how:

  1. Go to Lists menu and select Payroll Item List.
  2. Double-click the item (Addition, Deduction and Company Contribution).
  3. Mark the Track Expenses By Job box.
  4. Click Next until you can click the Finish button.

I've added an article about liability check for additional reference: Edit direct deposit liability check.

 

That should do it. Keep me posted if you have an additional question about tracking payroll items by class. I'll be happy to help you further. Have a great rest of your week. 

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Level 2

QB Desktop Payroll DD reclass

Thanks for your help. 

When I'm logged in, I get the error message that I'm not authorized to view the articles to which you linked.

 

I've adjusted the payroll liabilities check, per your suggestion. My problem now is that I need these items to appear under our "payroll expenses" accounts and not "payroll liabilities". The end result I need, if it's helpful, is for these line items to be visible on our P&L, not just the balance sheet.

 

I tried entering it all under the "Expenses" tab of the liabilities check, as the accounts show up there, but it would not let me save it that way. 

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Moderator

QB Desktop Payroll DD reclass

Hi there, @PeggyOliviaSmith

 

Allow me to share some information about the posting accounts for your payroll taxes. 

 

Just to confirm, which article provided by my colleague above isn't working? If the two articles are affected, I'll pass your feedback along here on my end to help update those links. 

 

I appreciate you adjusting the payroll liabilities check. Just to verify, which specific taxes that you considered to be tagged as payroll expenses and as payroll liabilities? The program will recognize the accounts you've set up in the Payroll Item list. 

 

The employer portion of your payroll taxes will automatically post to your payroll expense account. Then, the employee portion will affect Payroll Liabilities. The items under the expense account will directly appear on your Profit and Loss report. 

 

When creating a liability check, there isn't a need to enter those items under the Expenses tab (see the screenshot below).

 

The items under the Payroll Liabilities tab will still show up on your P&L report, not just your Balance Sheet report. I've attached a screenshot below to serve as your visual guide. 

 

 

 

For more information about the posting accounts that'll reflect on your P&L and Balance Sheet reports, please see this helpful article: Understand QuickBooks Chart of Accounts

 

Feel free to click the Reply button if you have follow-up concerns about this or should you need anything else. I'll be around to help, @PeggyOliviaSmith.

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Level 2

QB Desktop Payroll DD reclass

Thanks for your response. 

 

To confirm, yes, it was both article links that did not work.

 

Based on your thorough response, I'm thinking that I may need to add the expense accounts to which I'm used to posting to Payroll Items?

 

What I need to do is split each expense by three classes. To further complicate this, the amounts are not set amounts, but based on other things that I sort out on a spreadsheet that varies each month. For example, this is what a normal payroll entry looked like, before we started with QB Payroll.

 

Payroll Expenses: Gross Pay, +500, Class: A

Payroll Expenses: Gross Pay, +500, Class:B

Payroll Expenses: Gross Pay, +500,  Class: C

 

Payroll Expenses: Employee FICA Witholding, -500, Class: A

Payroll Expenses: Employee FICA Witholding, -500, Class: B

Payroll Expenses: Employee FICA Witholding, -500, Class: C

 

Payroll Expenses: Worker's Benefit W/B, -500, Class: A

Payroll Expenses: Worker's Benefit W/B, -500, Class: B

Payroll Expenses: Worker's Benefit W/B, -500, Class: C

 

Payroll Expenses: 401K- Employee 1, -500, NO CLASS

Payroll Expenses: 401K- Employee 2 , -500, NO CLASS

Payroll Expenses: 401K- Employee 3, -500, NO CLASS

 

And I have separate entries setup for monthly state and federal taxes 

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Anonymous
Not applicable

QB Desktop Payroll DD reclass

RE: So, for example, we have three separate amounts going to gross pay; one per each of our three classes.

 

In this case use three lines on the paycheck for earnings and enter a different class on each line.

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Level 2

QB Desktop Payroll DD reclass

Thank you. I think I've got that part. My problem now is that Gross Pay amounts are not showing on my P&L. The amounts are entered in the check under the Gross Pay item. I've separated the amounts by class and entered each on a separate line. However, when I open the P&L, it shows 0.00 under all classes for Gross Pay. 

Highlighted
Anonymous
Not applicable

QB Desktop Payroll DD reclass

The accounts used on your paychecks are a result of the payroll items' setup.  If wrong, then edit the items from the payroll item list and update the accounts. When you do, say yes to update the existing transactions and then they'll show up on your P&L.

View solution in original post

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Anonymous
Not applicable

QB Desktop Payroll DD reclass

Not sure as I don't understand what you're seeing.

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Level 3

QB Desktop Payroll DD reclass

When you go to edit the payroll items after payroll classes have been enabled in single user mode under preferences, there is still no option to tie payroll items to classes to update the prior reports. Also in the accountant reclassify transactions feature the payroll transactions are greyed out so you cannot reclass them from the accountants tools.

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QuickBooks Team

QB Desktop Payroll DD reclass

Hi there, @shortib.

 

Let's make sure to select the Earnings item feature so you can assign a class to each payroll item. Let me guide you through the steps.

 

Here's how to set preferences for tracking payroll item using classes:

 

  1. Go to the Edit menu.
  2. Select Preferences.
  3. Choose Payroll & Employees.
  4. Be sure that Full payroll is selected.
  5. Select Job Costing, Class and Item tracking for paycheck expenses.
  6. Click the Earnings item radio button.
  7. Hit OK.

Once done, you can now tie the payroll items to classes. You can read this article to learn more on how to track payroll item by class: Tracking Payroll Expenses by Class, Department, or Location.

 

On the other hand, the accountant Reclassify Transactions tool can't be used for payroll transactions. The tool can only be used for regular transactions, like checks, invoices, or bills.

 

You can check out this article for the detailed information: Reclassify Transactions in QuickBooks Desktop.

 

As always, you can visit our QuickBooks Community help website in case you need tips and related articles in the future. 

 

Please know that you can always get back into this post if you have more questions. I'll keep an eye out on your response.

Highlighted
Anonymous
Not applicable

QB Desktop Payroll DD reclass

RE: there is still no option to tie payroll items to classes to update the prior reports.

 

That's correct.  Updating the preference does not change your existing transactions.

 

In order to impact reports, you have to actually change the data by editing the paychecks and changing the classes you see there.

View solution in original post

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