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jessicachangecollaborative
February 24, 2022
Question

Payroll expense entry by customer

  • February 24, 2022
  • 1 reply
  • 0 views

I am hoping somebody has experience in processing payroll through QBO and allocating salary expense to a customer. I want to process payroll through QBO using time entries by customer. I am wondering how QBO calculates the wage expense to the customer if the employee is paid by salary. Does the system calculate an hourly rate and post that as wage expense to the customer or does the system generate an entry in some other way?

1 reply

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JonpriL
February 24, 2022

Hi @jessicachangecollaborative, I'll help share details about your payroll expenses.

 

Allocating payroll expenses to a customer for salaried employees is called billable time entries in QuickBooks Online (QBO). Salaried employees are set with hourly wages or rates to allocate and use this feature. I'll show you how to turn this on.

 

  1. Go to the Gear icon.
  2. Under YOUR COMPANY, select Accounts and settings.
  3. Select Expenses.
  4. On the Bills and expenses section, select the Pencil icon.
  5. Toggle to run on both Track expenses and items by customer and Make expenses and items billable feature.
  6. Put a checkmark on Track billable expenses and items as income selection.
  7. Choose how you want to track each billable time activity and the default terms used.
  8. Select Save.
  9. Click Done.

 

Here's an article to read and learn more about employees' billable time activity and allocating them to customers via invoices: How to Record Billable Expenses in QuickBooks Online?

 

I'm also adding this article for an overview about the benefits of time tracking for salaried employees: 4 Reasons Salaried Employees should Track Time.

 

I've got you covered if you've got questions about time tracking in QBO. You can use the Reply option below and leave a comment for me to get back and assist you. Take care always!

J
jessicachangecollaborativeAuthor
March 31, 2022

Now that I understand how the cost of a salary employee is billed in billable time, can you help me understand how this expense posts to the general ledger? Will the expense post to the general ledger by customer so we can run a PnL by customer, or do we have to use projects to track the billable time as a customer expense? 

C
Carneil_C
March 31, 2022

Thanks for getting back to us in Community, @jessicachangecollaborative. I'll chime in and help you with your concern about reports in QuickBooks Online Payroll.

 

Yes, I agree that you’ll have to use projects to track the billable time as a customer expense. That said, you can pull up a Project Profitability report.

 

Here’s how:

 

  1. Go to the Projects menu on the left side.
  2. Select the project the list.
  3. Choose Project Reports and click View in the Project Profitability.
  4. Hit Customize button and pick the relevant details in the fields.
  5. Tap Run report and review the data.


You can also print, export, and email the mentioned report for future use. For additional details, check out this article: Run payroll reports in QuickBooks Online

 

Additionally, visit these articles below to understand more about profitability and how the project works in QBO:

 

Please feel free to get in touch with me here for any additional questions with reports in QBO. The Community always has your back. Have a great day! 

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