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Intuit

Determining the source of payroll liability report balances

Overview

The balances on the payroll liabilities report come from the accumulation of amounts recorded by payroll items on various transactions. These payroll items include taxes, employee deductions, and company contributions that have been assigned to liability accounts.

Expected Outcome

You will be able to determine the reason for balances on your liability balance report.

Assumptions

You have created payroll and have balances in the payroll liability balance report.

Details

Dates play a very important role in determining whether a transaction is included on a liability report. For certain entry types, the transaction date is used to determine if a transaction will appear on a liability report, while on others, the ending date of the period affected is used.

You may need to expand or narrow your date range of the report to determine the source of the balance.

For the following examples, a report dated 5/1/2015 through 7/30/2015 will include:

  • Paychecks. The transaction date on paychecks is used. A paycheck dated 5/1/2015 for the pay period 4/15 - 4/30/2015 will be included. A paycheck dated 8/1/2015 for the pay period 7/15 - 7/30/2015 will not be included.
  • Employee year-to-date (YTD). The transaction date on these entries is used. The transaction date is the same as the period ending date, so any entry dated within the report range will be included.
  • Payroll liability checks. The liability period-ending date is used. A liability check dated 8/15/2015 that paid for a period ending 7/30/2015 will be included in the report. A liability check dated 5/15/2015 that paid for a period ending 4/30/2015 will not be included.
  • Prior payments. The liability period ending date is used. A prior payment dated 8/15/2015 that paid for a period ending 7/30/2015 will be included in the report. A prior payment dated 5/15/2015 that paid for a period ending 4/30/2015 will not be included.
  • Liability adjustments. The effective date of the adjustment is used. A liability adjustment dated 8/15/2015 that paid for a period ending 7/30/2015 will be included in the report. A liability adjustment dated 5/15/2015 that paid for a period ending 4/30/2015 will not be included.

To determine how liabilities were paid:

  1. Go to Vendors at the top menu bar, and click Vendor Center.
  2. Locate the liability Vendor in the list, right-click the vendor name, and choose Vendor QuickReport from the shortcut menu.
  3. Change the date range to incorporate the month showing the liability balance.
  4. Determine the type of payment under the Type column. If there is anything listed besides Liability Check, this means the liability was paid incorrectly.
  5. Pay the liability correctly from the Scheduled or Custom liability payments sections in QuickBooks.
  6. See Set up and pay scheduled or custom (unscheduled) liabilities for information about how to make liability payments in QuickBooks.
  7. Find the incorrect liability payment in the check register, and record the check number.
  8. Delete the incorrect payment.
  9. In the register, find the Liab Chk you just created and change the check number to the check number you just recorded.
  10. Click Save & Close.
  11. Create a Payroll Liability Balance Report to verify that the balance has been corrected.
    1. To access this report:

      1. Choose Reports > Employees & Payroll > Payroll Liability Balances.
      2. Click Customize Report and change the From and To dates to reflect date range you wish to view.

Note: If payroll liabilities were paid through Bill Payment or Write Checks this will not reduce your payroll liabilities and cause a balance.

Journal entries do affect the Payroll Liability Balance Report, but will affect the Payroll Liabilities account. To view additional transactions on the the Payroll Liabilities account click Lists > Chart of Accounts. Locate the Payroll Liabilities account and right-click to select QuickReport. See also Company and financial balance sheet report shows incorrect figures for payroll liabilities.

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