Posting an outsourced payroll bookkeeping entry into QuickBooks can be a challenge ranging from real easy to confusing.
For my client, Natalie, I have decided to collect an actual full detailed payroll report and also a payroll cash-needs report from her outsourced payroll provider after each and every payroll run, to enter this information (and ultimately match to the actual cash debits from bank account for easy reconciliation purposes) into QuickBooks.
To be able to exactly match the cash debits that her particular payroll provider processes, I have to collect the following information (and this includes breaking down this information further into exact departments within Natalie’s company itself):
- The total of net amounts paid to the employees.
- The total of employee-responsible (EE) tax deductions (FWH, SS, MEDI)
- The total of employer –responsible (ER) tax liabilities. (SS, MEDI, FUTA, SUTA)
- Payroll processing fees charged by the outsourced provider.
- Employee deductions paid out to other agencies (by the payroll provider) such as for Health Savings Accounts.
For other clients, I may handle an outsourced payroll posting task differently, depending on the actual accounting that the client and their CPA prefer.
The accounting for the above detailed entry (for Natalie’s books) will actually be quite simple; it is only going to affect the following accounts:
- Employer Taxes
- Payroll Fees
Again, I have to stress that other circumstances and preferences can affect the accounting differently in a client’s books.
Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.