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dsmith3
Level 2

Reclassifying some employees to COGS and administrative employees to expenses

I would like to move my help desk techs to COGS but keep my administrative team in expenses. I use quickbooks online and run the payroll myself. How do I reclassify only some employees?

Solved
Best answer March 12, 2019

Best Answers
AldrinS
QuickBooks Team

Reclassifying some employees to COGS and administrative employees to expenses

Welcome to the Community, dsmith3.

 

I'd be happy to help you reclassify your employees' payroll settings. Just follow these easy steps:

 

Edit Payroll Settings

  1. Click the Gear icon.
  2. Choose Payroll Settings.
  3. Select Accounting in the Preferences section
  4. In the Wage Expense Accounts section, select I use different accounts for different groups of employees.
  5. Choose the appropriate account (COGS) from the Wage Account drop-down menu for each employee.
  6. Scroll down and click OK.
  7. You'll be routed to the Account Preferences Summary page. In here, you're given the chance to update the existing transactions of your employees. Just enter the correct Starting Date, then click Update.
  8. Hit OK once the update is complete.

Before you go, please be sure to reach out to an accounting consultant to ensure this method is the best suit for your business. With Intuit's Find-A-ProAdvisor site, you can search for certified professionals in proximity to your ZIP code that can discuss options more personal to your business's needs.

 

Be sure to let me know if there's anything else I can do to help you succeed with QuickBooks. Thanks for reaching out, wishing you and your business continued success.

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16 Comments
AldrinS
QuickBooks Team

Reclassifying some employees to COGS and administrative employees to expenses

Welcome to the Community, dsmith3.

 

I'd be happy to help you reclassify your employees' payroll settings. Just follow these easy steps:

 

Edit Payroll Settings

  1. Click the Gear icon.
  2. Choose Payroll Settings.
  3. Select Accounting in the Preferences section
  4. In the Wage Expense Accounts section, select I use different accounts for different groups of employees.
  5. Choose the appropriate account (COGS) from the Wage Account drop-down menu for each employee.
  6. Scroll down and click OK.
  7. You'll be routed to the Account Preferences Summary page. In here, you're given the chance to update the existing transactions of your employees. Just enter the correct Starting Date, then click Update.
  8. Hit OK once the update is complete.

Before you go, please be sure to reach out to an accounting consultant to ensure this method is the best suit for your business. With Intuit's Find-A-ProAdvisor site, you can search for certified professionals in proximity to your ZIP code that can discuss options more personal to your business's needs.

 

Be sure to let me know if there's anything else I can do to help you succeed with QuickBooks. Thanks for reaching out, wishing you and your business continued success.

View solution in original post

bgoodrud
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

How do I get to payroll settings in quickbooks desktop to choose to break out my employees by different categories?  I also have enhanced payroll if that matters.  I went to payroll set- up and payroll preferences and don't see it. I don't see an option to select that I Use different accounts for different groups of employees.  TIA

MadelynC
QuickBooks Team

Reclassifying some employees to COGS and administrative employees to expenses

Hi @bgoodrud,


For a group of employees, you’ll want to enable class tracking and add a class to your employee’s profile. Here are the steps you can follow:

 

  1. Go to the Employees menu.
  2. Choose Employees Center.
  3. Select an Employee, then select the Payroll Info tab.
  4. Add Class, then hit OK.


You can also add an item name under earnings if you’d like to automatically show to employee’s paycheck.

 

QuickBooks Desktop uses payroll items that can assign to different accounts. Here’s how:

 

  1. Select Lists at the left top and choose Payroll Item List.
  2. Click Payroll Item.
  3. Select New and hit Custom Setup.
  4. Enter the necessary information. 
  5. Select the Expense account you created.
  6. Hit Next until you can select Finish.

You can refer to these articles for additional reference:

 

Leave a post below if you have other payroll-related questions or concerns. I'm always here to help.

bgoodrud
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

In Enterprise 20 desktop how do I get to the payroll settings screen?  I've looked in preferences under both accounting and payroll.  I don't see where I can select "I use different accounts for different groups of employees" anywhere.  FYI, I have advanced payroll.

bgoodrud
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

I though there is a way to set it up using GL accounts so it breaks it out on the main P&L and I want to do it that way not with classes.  I have classes set up differently already.

Rose-A
Moderator

Reclassifying some employees to COGS and administrative employees to expenses

Let me help you sort this out, bgoodrud.

 

To use another account for your payroll transactions, you'll need to create a separate payroll item and choose the expense account from there (see sample screenshot below). You can follow the detailed steps provided by my peer above in creating a new payroll item in QuickBooks Desktop.

 

 

Additionally, you can visit these write-ups to know more about changing your bank account for QuickBooks Desktop Payroll:

 

Change your direct deposit bank account for QuickBooks Desktop Payroll

Change an expense or liability account associated with a payroll item

 

If there's anything else you need please let me know. I'd be more than willing to lend you a hand.

dorisng
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

I'm trying to doing this as well and wasn't able to find a button that says, "Starting Date". 

 

Currently, I adjusted my chart of accounts to reflect the direct labor and regular admin employee and it's not reflecting on my P&L. I'm using QBO. help! 

MaryJoyD
QuickBooks Team

Reclassifying some employees to COGS and administrative employees to expenses

Let me help you edit your payroll settings, @dorisng.

 

You’ll not see the Starting Date button in the Account Preferences Summary page if you’ve not used that payroll item on the paychecks. Just click on the OK button at the bottom after updating all the information.

 

Here are some references that you can check in payroll settings:

Let me know if there's anything that I can help. I'm always here to assist.

dorisng
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

I'm on QBO. This is what I have on my adjustments and it's not working. 

 

 

tmarticke
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

There is no button for start date, please provide  information on how to reclassify existing payroll expenses to a new payroll expense category. I can update it going forward but see no option to change the category for existing payroll expense transactions.

Ironmikesharp
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

Once you make the change from wage expense to COGS - does it at all impact payroll reports, such as payroll summary report? I guess I am wondering that if I change the classification - do I need to amend something on the payroll reports.


Thank you,

Kristine Mae
QuickBooks Team

Reclassifying some employees to COGS and administrative employees to expenses

Let me help you from here, Ironmikesharp.

 

Once you change the account to COGS, it will affect accounting reports like Profit and Loss. Although, it doesn't impact the Payroll Summary report since you're unable to see the affected accounts. That means you don't have to amend something on the payroll reports. 

 

I'll share the article about how to run payroll reports as a future reference.

 

Feel free to reach out to us if you have other payroll concerns. We're just a post away.

Ironmikesharp
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

Thank you Kristine,

 

  Lovely - I am looking to move the salaries up to COGS, so as to capture the inputs from the manufacturing and fabrication piece.  Is there a way to assign certain employees to COGS and to keep some on the salary expense line?

Rejeil_O
QuickBooks Team

Reclassifying some employees to COGS and administrative employees to expenses

Thank you for getting back here in the thread @Ironmikesharp.

 

In QuickBooks, you're not able to assign your certain employees to COGS. Cost of Goods Sold tracks all of the costs associated with the items you sell, which allows you to calculate gross profits accurately. Also, give the total underlying costs on your Profit & Loss reports.

 

In posting your employee salary into COGS, you can create a journal entry. You can follow these steps on how:

 

  1. Go to the +New button.
  2. Under the Other column, select Journal Entry.
  3. Fill out the fields to create your journal entry. Note: I recommend contacting an accountant to seek for assistance on what account you should use.
  4. Click either Save and new or Save and close.

 

You can review the transactions you entered and print it using the journal entry report. Check out this article: Print a journal entry report.

 

You may also use this article for more detailed information about payroll in your QuickBooks Online account: Get started with Payroll.

 

Please know that I'm always around here in the Community to help. Take care, and have a good day.

Ironmikesharp
Level 1

Reclassifying some employees to COGS and administrative employees to expenses

Good morning,

  Thank you for your response.  Is there a way to assign all salary to COGS as opposed to certain employees?Can you please provide direction on that and if I have to be in single user mode in order to make that change?


Thank you,

MichelleBh
QuickBooks Team

Reclassifying some employees to COGS and administrative employees to expenses

Thank you for coming back on this thread, @Ironmikesharp.

 

I can help walk you through the steps on how to assign all employee's salaries to COGS in QuickBooks Desktop. 

 

Let's change the Salary Item to COGS by going to the Payroll Item List. Right-click the Salary Item, then click Edit and choose COGS in the account drop-down arrow. Please note that all employee's salaries will post to the COGS account moving forward. 

 

Before you go, please be sure to reach out to an accounting consultant to ensure this method is the best suit for your business. 

 

See the sample screenshot below: 

 

 

For the detailed steps, please visit this article: Edit a payroll item.

 

You can always access different payroll reports by going to the Reports menu, then select the Employees & Payroll tab. For more information, you may check out this article: Customize reports

 

Please browse through this article for your future reference: Edit payroll items used on paychecks. This link includes steps on how to change incorrect payroll items used on paychecks.  

 

Let me know if you follow-up questions. I'm always here to help. Take care. 

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