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kathleen825
March 6, 2022
Question

How to enter 3rd party payroll company into Quickbooks online when they automatically deducts from the bank account

  • March 6, 2022
  • 2 replies
  • 0 views

Our company uses Paychex and I would enter the payroll under 3 categories, payroll expense wage (debit) , Payroll expense tax (debit) and payroll liabilities (credit). Then I would use the journal to put the payroll liabilities and entered the bank it paid to balance it. But it would show on the banking account double the payroll liabilities. We are using quickbooks online so under the banking part, i would show the charges and I would add it to the assigned account, is this causing double credits? how do I fix it

 

2 replies

LieraMarie_A
LieraMarie_A
March 6, 2022

Hi there, @kathleen825. I'll share with you the steps on how to manually enter paychecks in QuickBooks Online.

 

If your payroll service doesn't import data directly into QuickBooks, you'll have to track these payments as journal entries. First, you'll want to undo the bank transaction you've added. Then, edit the journal entry you've created.

 

Here's how to undo it:

  1. Go to the Banking or Transactions menu.
  2. Go to the Banking tab.
  3. Click the tile for the bank account.
  4. Select the Categorized tab.
  5. Find the transaction you need to delete.
  6. Select Undo from the Action column. This will move the transaction back to the For Review tab. You'll want to exclude it from the list.

 

After that, edit the journal entry you've created for your payroll expenses and liabilities. 

  1. Select the Gear icon and then Chart of accounts.
  2. Find the account you created the journal entry for. Then select View register.
  3. Find the journal entry in the account register. The word "Journal" should be in the Ref No. or Type column.
  4. Select the journal entry to expand the view. Then select Edit.
  5. Then, follow the detailed steps in this article: Manually enter payroll paychecks.

 

Just let me know in the comments if you need more help with tracking your paychecks. I'll be happy to help.

K
kathleen825Author
March 7, 2022

Thank you, I was able to exclude the bank transaction but on the journal, I would enter the payroll liabilities as credit and on the next line I then enter the bank name and the same amount as debit. But now it shows all the payroll liabilities as a positive number on the balance sheet. 

G
Giovann_G
March 7, 2022

You did a great job excluding the bank transactions, kathleen825. 

 

You're on the right track. I'll explain why the payroll liabilities on the balance sheet report are displaying as positive numbers.

 

The liability amount on the balance sheet should always display in positive numbers. It only shows a negative amount due to these several reasons:

 

  • Incorrect tax rate.
  • You've deleted a paycheck after the tax payment was approved for the payroll period.
  • Incorrect reconciliation of historical taxes.
  • A duplicate tax payment was made or overpayment.

 

I've got this resource that contains helpful information about managing the balance sheets in QuickBooks Online: Understanding the Balance Sheet: Asset, Liability, and Equity.

 

You might also want to check out these articles below that give you some insights about the reconciliation process for future reference:

 

 

If you have any other questions or concerns with the balance sheet report, feel free to post here at any time. I'm always here to help you.

T
TFletch
May 17, 2023

My question with this process using PAYCHEX, they pay the withholding/taxes for us, so there really would never be a tax liability needed...correct?  In my company's case...We'd just expense the net payroll and the employer's portion of taxes (since they are paid to Paychex at the time payroll processes). 

 

So the only liability I am thinking that needs to be set up is the IRA (employee money withheld and the employers portion).....and the NYS PFL and Disability, with is paid by our company later.

 

I am I thinking this through correctly?

K
Kevin_C
May 17, 2023

Hello there, @TFletch. I'm here to share details about your concern regarding recording liabilities from other payroll software to QuickBooks Online.

 

Yes, you're in the correct process of recording only the other liabilities, which will be paid by your company later since the tax liabilities are.

 

Moreover, I'd also recommend seeking assistance from your accountant to help and provide more expert ways of dealing with this situation.

 

Additionally, you can check out this article to pull up a variety of payroll reports that will give you a closer look at your employee's total wages, deductions, and tax information in a certain period: Run payroll reports in QuickBooks Online Payroll.

 

Let me know if you have other payroll-related issues or any other questions. I'll be glad to help you out. Stay safe!

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