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TBM1
November 22, 2021
Question

Quickbooks counting both gross and net pay as payroll expense - please help

  • November 22, 2021
  • 3 replies
  • 0 views

Hello - I have spent 4 hours on the phone with QBO today (including Level 3 support, QB Live, Payroll, etc.)  and not a single person was able to help me. Here's the basic issue:


Our payroll expense in our P&L is ~60% higher than it should be. This is due to QBO classifying both gross pay via QB Payroll as well as the direct deposit to our employees for net pay as a Payroll Expense. If I take all Payroll Expense transactions, we have the following labels below. If you add up everything with payroll check, you get an exact match to our payroll. However, all of the "expense" classified items add up to 60% of the Payroll check figures (mostly driven by the wages expense) and are resulting in much higher overall payroll expenses than actual. 

 

Payroll Expense: Health Insurance

- Expense

- Payroll Check (Accurate)

 

Payroll Expense: Taxes

- Expense

- Payroll Check (Accurate)

 

Payroll Expense: Wages

- Expense

- Payroll Check (Accurate)

 

So my two questions are: 1) how do I fix this so it does it automatically the right way? 2) how do fix the past transactions to ensure an accurate P&L?

 

I assume it has something to do with creating a clearing account or something like that, just not sure what to do. Thank you

    3 replies

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    DavidSeattle
    November 30, 2021

    I have the same issue and also spent the best part of a day with QBO agents on the phone.  One of the agents was able to at least help with part of the problem; that of fixing it automatically so problem goes away. 

     

    The QBO agent had me verify/update the bank account number in TWO places under Payroll settings.  It appears there are two places in payroll settings where the bank account # should be updated, there is the obviously visible one in payroll settings but there was another, more obscure, location which should have also been updated and the QBO agent had me update this field as well to the correct bank account number.  Unfortunately, I cannot recall the navigation to where this second update was made but I know it's there (agents I dealt with were Shadoe S, Alex and Heather, not sure which one fixed it).

     

    I am still trying to find the fix for the second question, that of how to fix the past transactions to ensure an accurate P&L.  I am currently having our 3rd party accountant suggest a solution (still waiting for that answer).

    S
    sprock
    April 13, 2022

    Any fixes?  I have uncategorized the direct deposit amounts, now I don't know what to do to match them where the P&L is correct?

    MaryLandT
    MaryLandT
    April 14, 2022

    I'm here to help ensure your payroll transactions are posted to the correct accounts, sprock.

     

    There's one place to check and track your payroll transactions. And, you can proceed to the Payroll Preferences to track payroll wages, taxes, deductions, and company contributions.

     

    Follow the steps below to update your payroll accounting settings.

     

    1. Go to Settings ⚙, then Payroll settings.
    2. Click Edit ✎ next to Accounting.
    3. Select Edit ✎ to update a specific section.
    4. Choose which account the transaction of the specific payroll item should go to, then select Continue.

     

    If you need to apply these changes to past transactions, select Edit ✎ next to Want to update existing transactions, then add a Start Date. 

     

    In case you need to update the bank account for your payroll, here's a guide for you: Learn how to change your company's bank account information. Choose QuickBooks Online for instructions and detailed steps.

     

    Keep me posted if there's anything else I can help you with your payroll transactions. I'll be right here to guide you.

    F
    Fred Nie
    December 21, 2022

    Encountered the same issue, and tried all the methods mentioned in this conversation, still not fixed yet, could someone share more on that? thanks !

    X
    XYZ77
    January 30, 2024

    Hello, consider GROSS WAGES (debit) as an expense, and NET WAGES, taxes, and others as liabilities (credit); then in the -payroll settings - accounting - edit-, under wage expenses: choose wages as a liability, i.e. change the account that shows in there for 'payroll liabilities'. After that you can update from what date you want start the correction, don’t write nothing on -end date-.

    After two days of thinking how to fix it finally I did it. What I did solve the problem for me! Good luck.

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