First, I'm not using QuickBooks Payroll. Given that... How do I enter a reimbursement in to an Employee in QuickBooks Desktop?
We have an Employee that is being reimbursed for telephone expenses. In our current QuickBooks setup we have entered that Employee as an "Employee" in the Employee Center (even though we do not use the payroll feature) and also added them as a "Vendor" in the Vendor Center (with a different extension to denote the difference). Then we add a Bill to the Vendor version to record the amount due to the Employee. Last, when we pay them later, we enter a Bill Payment against that Bill.
How should this be done properly? It doesn't seem correct to have to enter an employee as both an "Employee" and "Vendor" to do this. Also, not sure doing a reimbursement item and then paying it with a payroll check seems right because we don't use QuickBooks payroll and don't cut payroll checks to employees in QB.
Thank you for posting here in the Community. I'm here to provide some clarification about running payroll and entering a reimbursement in QuickBooks Desktop.
Entering an employee as a vendor isn't advisable. Let me share some details about how you can access the payroll feature without subscribing to the service.
Users who choose not to subscribe to any of the QuickBooks Desktop Payroll Services can set up manual payroll. This feature allows you to manually calculate payroll tax figures and enter them for each paycheck.
Please note that the system won't calculate any taxes or provide payroll tax forms. If you haven't enabled it yet, please start with making sure your computer is not connected to the internet.
Once done, you can proceed with the following steps to set up your company preferences for payroll:
Click Edit at the top, and then select Preferences.
On the left panel, select Payroll & Employees then go to the Company Preferences tab.
In the QuickBooks Desktop Payroll Features section, select the Full Payroll radio button.
After following the steps above, please proceed with enabling the manual payroll. Here's how:
Click Help at the top, and then select QuickBooks Help (or press F1 on your keyboard).
In the Search field, type manual payroll and press Enter on your keyboard.
Select the topic Calculate payroll manually (without a subscription to QuickBooks Payroll).
Under Set your company file to use the manual payroll calculations setting, click the manual payroll calculations link.
Select Set my company file to use manual calculations link. When your company file is set up for manual payroll computation, QuickBooks inserts a zero amount for each payroll item associated with a tax.
Close and reopen QuickBooks Desktop.
If you're able to activate the manual payroll, you can now enter the reimbursement. First, create a new payroll item.
Please follow these steps:
From Lists on the menu bar, select Payroll Item List.
Select Payroll Item then select New.
If you're using a U.S. version of QuickBooks only, select the Custom Setup option button. Then select Next.
Select the Addition item type. Then select Next.
Select an expense account to track travel or mileage amounts. Or if this will be an advance to the employee, choose an asset account.
Set the Tax Tracking type to None so that the amounts don't report on tax forms. Then select Next.
For amounts paid per mile/kilometer, select the Based on Quantity checkbox. Then select Next.
If the reimbursement is part of the payroll, you can create the paycheck. Click the Employees tab at the top, hover your cursor to Pay Employees, then select Scheduled Payroll, Unscheduled Payroll, or Termination Check.
In case you've failed to activate manual payroll, I recommend contacting our Payroll Support Team. They'll be able to help you further with the process.
Let me walk you through how:
Go to the Help menu of the company file, then select QuickBooks Desktop Help.