How To Properly Record Outsourced Payroll

1. QuickBooks Tip: How To Properly Record Outsourced Payroll Ref : goo.gl/VST4AQ

2. Before handling the record of the payrolls, let us first understand what the payroll actually is? As per Investopedia, Payroll is the sum total of all compensation a business must pay to its employees for a set period of time or on a given date. Big firms have its account department who keeps track of the payrolls while for the small businesses, affordability is the issue. Hence, the owner or associates handle the payrolls on their own. If the payrolls are outsourced, it is a good way to record the accounting information for these transactions. However, it may create confusion at the time of entering it into QuickBooks. Ref : goo.gl/VST4AQ

3. Some consider re-entering the payroll, while others as a journal entry to save time but they often don’t know how to do it. • Gross Payroll v/s Net Payroll: To clear the confusion, it is necessary to understand the key difference between gross payroll and net payroll. The amount you pay to your employees before deductions is called Gross Payroll. Net Payroll is what your employees actually get after deductions. This is a mixture of payroll expenses and payroll liabilities like medical insurance, contributions etc. Ref : goo.gl/VST4AQ

4. Moving on to the tips of recording outsourced Payroll: • Actual Payroll Checks: If the outsourcing company doesn't take out the payroll checks, their payroll fees etc. from your account, you will have to do it manually for each record. Enter wage as a positive number. All employee payroll taxes and any deduction should be entered as the negative number and should hit the liability account. The final result of this payroll check should equal the amount that the check was written for. • Direct Deposits: This is same as the actual payrolls, the only difference is that you have two choices – if you want to check each employee’s deposits individually in QuickBooks or you want to enter them as a journal. Entering the details are same – wages as positive and payroll taxes and deductions as the negative number. Ref : goo.gl/VST4AQ

5. • Payroll Service Fee: The amount to be paid to the outsourcing company also has to be added in this. Enter a check in the name of the service provider of the total amount of the payroll fee and enter it as an expense. • Recheck: This is an important tip after having all done. Rechecking helps you detect your flaw if there any. There are two ways to get it done - look at your chart of accounts and make sure all payroll liability accounts have a balance of zero as they should, or check the service fees the outsourcing company too. This should be equal to the sum of direct deposits, payroll taxes of both employee and employer, and the payroll fee. It also includes the liability of actual payroll check if the service provider takes it into account. You can save some time from this marathon work by saying the outsourcing company to build a file that can import all the transactions directly into QuickBooks. Save more on your accounting, by moving to our QuickBooks Hosting or QuickBooks Enterprise solutions and enjoy benefits like flexible billing, low costs, anytime anywhere access, automated back-ups, robust infrastructure and enterprise grade security. Ref : goo.gl/VST4AQ

6. Thank You For Quickbooks Hosting and Quickbooks Enterprise Hosting Call Toll-Free: 1-855-909-3300 E-mail: support@techarex.net or Visit: www.techarex.net Ref : goo.gl/VST4AQ