Hi there. My employees bank direct deposit did not go through after I ran his bi weekly payroll> QB has reversed the entry. How do I now run a manual payroll cheque?

Hi @deeTPS 

Journal entries are a good way to record the accounting information for your payroll in QuickBooks Online if you are not using our payroll service.

Below is an example of how to record a payroll journal entry transaction.

Example:

Fred's Residential Remodeling Company has five employees. For the Journal entry, you would take the gross pay for the employees.  In this example $4055.00 is the total amount.

1. Go to the Plus Sign Icon and select Journal Entry.
2. Under Date, select the paycheque(s) date.
3. (Optional) Input Entry # for journal entry.
4. Debit and Credit accounts:
   • Debit expense account used to track gross wages ($4,055.00).
   • Debit expense account used to track Company Contribution (eg. CPP, QPP, EI etc.) ($251.41).
   • Credit Bank account payroll is deducted from ($4306.41). Note: To make entry easier next time, the next two steps go over how to save the transaction. If you only wish to do the transaction once, or have the QuickBooks Online EasyStart version, please skip these steps.
5. Click Make Recurring.
6. Enter a memorable Template Name and set Template Type to Unscheduled; click Save Template.
7. Click Save. Note: To access this template depending on the interface you see go to the Gearicon and select Recurring Transactions. Make sure to change amounts and/or accounts as necessary.

Using the same example, if the employer was responsible for paying the liability, the lines on the journal entry would go like this:

1. Debit expense account used to track gross wages ($4,055.00).
2. Debit expense account used to track Company Contribution (eg. CPP, QPP, EI etc.) ($251.41).
3. Credit Liability account used for tracking payroll liabilities ($1228.67).
4. Credit bank account used for processing payroll by net amount of the paycheques ($3136.54).

Now there is $1,228.67 sitting in a liability account waiting to be paid. When the cheques to pay the liability are written you would point the cheque to the liability account used in the journal entry. This will zero out the liability or lower it to the current amount outstanding.

This is a very basic example. For more complex payroll transactions you should consult with your payroll service and/or accountant. If you don't have an accountant no need to worry, we can help. You can go to My Accountant>Find a pro to help to find an accountant in your area.

If you have any questions please feel free to reach out and let us know. We'd be happy to help.