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Q U I C K B O O K S D E S K T O P 2 0 1 7 C E R T I F I C A T I O N C O U R S E

Supplemental Guide Module 7: Set up and Use Payroll

and Time Tracking

Copyright

Copyright 2016 Intuit, Inc. Intuit, Inc. All rights reserved. 5601 Headquarters Drive Plano, TX 75024

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Supplemental Guide – QuickBooks Desktop 2017 Certification Course Table of Contents

Module 7: Set up and Use Payroll and Time Tracking 1

Table of Contents

About the Author ....................................................................................................................... 3

Module Guide Overview ........................................................................................................... 4

Guide Introduction ........................................................................................................................................... 4

Learning Objectives ......................................................................................................................................... 4

Topic 1: Payroll Overview ......................................................................................................... 6

Which Payroll Solution is Best for Your Client? ............................................................................................. 6

The Payroll Center ............................................................................................................................................ 9

Information Required to Set up Payroll ....................................................................................................... 14

Topic 2: Payroll Subscriptions and Setup ................................................................................ 15

Set up Payroll Using Intuit Online Payroll for Accounting Professionals ................................................. 15

Payroll Service Keys ....................................................................................................................................... 19

Set up Payroll Preferences ............................................................................................................................ 20

Set up User Access ......................................................................................................................................... 23

Set up Payroll Items........................................................................................................................................ 25

Custom Setup of Payroll Items ..................................................................................................................... 26

Tax Tracking and Mapping Payroll Items to the Chart of Accounts ......................................................... 29

Payroll Schedules ........................................................................................................................................... 35

Set up Employees’ Personal and Payroll Info .............................................................................................. 36

Use the Payroll Setup Wizard ........................................................................................................................ 37

Enter Prior Paychecks and Liability Payments ............................................................................................. 38

Use Payroll Setup Wizard to Set up Scheduled Liabilities ......................................................................... 39

Topic 3: Prepare Payroll .......................................................................................................... 40

Process Payroll ................................................................................................................................................ 40

Email Pay Stubs .............................................................................................................................................. 48

Pay Payroll Liabilities ...................................................................................................................................... 49

Identify and Fix Payroll Liability Issues ......................................................................................................... 53

Generate Reports for State and Federal Payroll Tax Returns .................................................................... 55

Client-Ready Payroll Reports ........................................................................................................................ 57

Supplemental Guide – QuickBooks Desktop 2017 Certification Course Table of Contents


Topic 4: Time Tracking ............................................................................................................ 59

Track Employee and Vendor Time for Job Costing ................................................................................... 59

Set Up Employees for Time Tracking .......................................................................................................... 61

Allocate Hourly Employee Expenses to Customers and Jobs .................................................................. 61

Report on Time and Expenses ...................................................................................................................... 62

Topic 5: Payroll and Time Tracking Tips .................................................................................. 64

After-the-Fact Payroll ..................................................................................................................................... 64

Replace Lost or Damaged Paychecks .......................................................................................................... 65

Record Employee Loans and Loan Repayments ........................................................................................ 65

Adjust W-2s and 941s .................................................................................................................................... 66

Pay Company and Employee Expenses ...................................................................................................... 66

Guide Conclusion .................................................................................................................... 67

Supplemental Guide – QuickBooks Desktop 2017 Certification Course About the Author


About the Author

Randi has been a business and accounting consultant for over 20 years. She works with small- to mid-sized businesses setting up accounting and point of sale departments. She develops policies and procedural systems so clients can manage their business finances on their own or with a staff. She is also a tax return preparer. Her past experience as a controller for a large mortgage banking firm has ensured that she knows what it takes to run an accounting department.

As an Advanced Certified QuickBooks ProAdvisor and member of the Intuit Trainers/Writers Network, Randi is honored to present other accountants with tools to fully utilize QuickBooks financial software in working with their clients. She has authored Accounting Practice Sets for Accounting Modules at the university level, as well as articles for publication.

Randi Sorenson, CPA

Sorenson Business Consulting, Inc.

Supplemental Guide – QuickBooks Desktop 2017 Certification Course Overview


Module Guide Overview

GUIDE INTRODUCTION

Welcome to the QuickBooks 2017 Desktop Certification course. Besides in-product demonstrations and tips from your ProAdvisor presenters, you have access to the PDF Module Supplemental Guides that accompany each of the 10 modules in this course for easy review of the information covered. Each of the ten module guides provides contextual information and details to accompany its recorded counterpart. This guide was authored as a supplementary tool and contains written descriptions and illustrations.

LEARNING OBJECTIVES

Upon reading the instructions provided in this guide, you will be able to:

• Topic 1: Payroll Overview

Determine the payroll solution that is best for your client

Distinguish the benefits of Intuit Full Service Payroll Identify features of the Payroll Center

Specify the information required to set up payroll

• Topic 2: Payroll Subscriptions and Setup

Determine the steps in setting up Intuit Online Payroll for Accounting Professionals

Recognize the steps to use Payroll Service Keys

Recognize the steps to set up company preferences and user access

Identify the steps to set up payroll items, employees and schedules Recognize the steps to enter accurate year-to-date pay and liability payments

Distinguish the steps to set up payroll tax liability schedules

• Topic 3: Prepare Payroll

Identify the steps to record payroll in Intuit Online Payroll for Accounting Professionals

Recognize the steps required to create paychecks in QuickBooks

Identify the steps to report and remit payroll liabilities and file payroll tax forms Recognize the steps to generate reports for state and federal payroll tax returns

Specify the steps to generate client-ready payroll reports

• Topic 4: Time Tracking

Supplemental Guide – QuickBooks Desktop 2017 Certification Course Overview


Identify the steps to track employee and vendor time

Determine the steps to allocate salaried employee payroll expenses to certain customers and jobs

Identify the steps to allocate hourly employee expenses to certain customers

Recognize the steps to create time and expense reports

• Topic 5: Payroll and Time Tracking Tips

Specify the steps to enter after-the-fact payroll

Identify the steps to replace lost or damaged paychecks

Determine the steps to pay company and employee expenses

Supplemental Guide – QuickBooks Desktop 2017 Certification Course Topic 1: Payroll Overview


Topic 1: Payroll Overview

In this topic you'll review the QuickBooks payroll offerings, be introduced to the Payroll Center and learn about the payroll setup process.

WHICH PAYROLL SOLUTION IS BEST FOR YOUR CLIENT?

Payroll begins with the right service solution for your clients. There are a lot of options available when deciding which way to go with payroll.

In order to make an informed decision, you should look at various factors such as:

• How many employees do they have?

• What are the state filing requirements where their employees are located?

• Do they have someone on staff who is able to process their payroll?

• Do they need to outsource their payroll duties?

• Are they using QuickBooks for their accounting needs in their office?

• Is their accounting outsourced to their accountant?



While the answer to the question of which solution is right for you and your clients can’t be answered right here and now, let’s look at some of the current payroll offerings which work or sync with your QuickBooks Desktop and might help you make that determination.

• Desktop Basic Payroll

• Enhanced Payroll for Accountants & Desktop Enhanced Payroll

• Assisted Payroll

• Intuit Full Service Payroll for Accountants & Intuit Full Service Payroll

• Intuit Online Payroll for Accounting Professionals

The first three options allow you to enter your timesheets and process your payroll directly in QuickBooks. Enhanced Payroll for Accountants & Desktop Enhanced Payroll allows you to enter your timesheets directly in QuickBooks. QuickBooks will calculate and generate your payroll checks, liability checks and tax forms for you.

Assisted Payroll takes it a step further and processes and pays all of the tax liabilities for you, as well as automatically filing all required state and federal forms, including forms W-2 and W-3.

Desktop Basic Payroll

Enhanced Payroll for Accountants & Desktop Enhanced

Payroll Assisted Payroll

Intuit Full Service Payroll for

Accountants & Intuit Full Service

Payroll

Intuit Online Payroll for Accounting

Professionals

Integrates with QuickBooks YES YES YES YES YES

Easy paychecks: Just enter hours

YES YES YES YES YES

Pay by Check or direct deposit

YES YES YES YES YES

Free expert support YES YES YES YES YES

Prepare & process year-end Form W-2

YES YES YES YES

Federal & State payroll tax forms automatically

populated

YES YES YES YES

Federal & State payroll tax filings sent for you YES YES YES

Federal & State payroll tax deposits sent for you

YES YES YES

No tax penalties guaranteed

YES YES

Payroll setup completed for you

YES



Intuit Full Service Payroll for Accountants, Intuit Full Service Payroll and Intuit Online Payroll for Accounting Professionals are cloud-based services that will integrate the payroll data into your QuickBooks Desktop after it is processed.

Intuit Online Payroll for Accounting Professionals (IOP4A) allows you to run the client’s payroll and have complete access to their data, while giving the client varying levels of access depending on how much or how little they want to be involved in payroll tasks. The client does not have to be using QuickBooks.

From the client’s perspective you become the provider of their payroll service. There are reminders of when payroll should be run for your clients.

Payroll taxes and tax forms may be prepared and submitted online for many tax jurisdictions. Go to http://payroll.intuit.com/support/kb/2000463.html for the full list.

Intuit Full Service Payroll handles your client’s payroll for them, using similar input and output as with the IOP4A. However, Intuit is the client’s support in the setup and running of payroll. Intuit reviews each payroll, reminds when taxes are due so clients can verify the funds for payroll are available and handles all the required tax filings for clients.

Intuit Full Service Payroll for Accountants is similar to Intuit Online Payroll for Accounting Professionals in that it allows you to manage multiple clients in one online portal.

http://payroll.intuit.com/support/kb/2000463.html



THE PAYROLL CENTER

The Payroll Center has everything you need to run and process payroll using both Enhanced and Assisted Payroll.

On the left there are three tabs:

• Employee data

• Transactions paid to employee list names

• Payroll runs and process payroll, payroll liabilities and tax forms



On the Pay Employees tab you are able to create paychecks and view recent payroll runs, along with a host of other activities that have been added to the screen, such as setting up direct deposit and sending paychecks to View My Paycheck. This is a great service that allows you to upload your employees’ pay data to the cloud so they are able to view their pay history, obtain replacement W-2s, etc. You are also able to run some of the most common payroll reports directly from this Pay Employees screen.



On the Pay Liabilities tab, if you are using Enhanced Payroll, you will be able to pay your liabilities either by writing a check or by e-paying online. You can also run liability reports from this screen.

For Assisted Payroll users, you are able to see the liabilities that were paid for you.



On the File Forms tab, you can prepare and process your payroll tax forms and print or e-file.



On the top ribbon, from the top of the Employee Center, you may access Entering Time, Print or email pay stubs, prepare Client-Ready Payroll reports, review and make changes to your Payroll Service and learn more about payroll.

As you can see, this design enables you to do everything within one center in QuickBooks.



INFORMATION REQUIRED TO SET UP PAYROLL

There are two ways to set up payroll in QuickBooks. If you are familiar with payroll terms, you can set up payroll via the standard method of adding list elements. If you are new to the payroll process, the Payroll Setup Wizard will guide you through the process of setting up the required items. The Payroll Setup Wizard can be started by clicking the Employees drop-down menu then selecting Payroll Setup.

The following is information you will need before you begin your payroll setup:

• Federal and state tax ID#s

• Employee information

Name

Address

Social Security #

Pay rates W-4 information

• Benefits information

Retirement plans

Vacation plans

Sick days

• Year-to-date payroll and liabilities

• Year-to-date tax returns and liability payments

It is very beneficial to have all documents and information on hand before starting Payroll Wizard so you do not have to repeatedly go in and out of the setup process.

Supplemental Guide – QuickBooks Desktop 2017 Certification Course Topic 2: Payroll Subscriptions and Setup


Topic 2: Payroll Subscriptions and Setup

SET UP PAYROLL USING INTUIT ONLINE PAYROLL FOR ACCOUNTING PROFESSIONALS

Intuit Online Payroll for Accountants (IOP4A) walks you through the setup of your client’s payroll. After you log in to your account you will start by choosing clients.

Step-by-Step: Set up Payroll

1. Click Add Client. Fill in the State, Number of Employees and Business Type.

2. Determine whether you are going to bill the client yourself or want them to be billed by Intuit.



3. On the next screen choose whether you would like the service to create your federal and state tax forms using Enhanced, or you are going to prepare them yourself choosing Basic.

4. Complete the client information, including choosing whether or not you are going to give the client access to this account. This option can always be changed at a later date.

5. Set up employees. Choose Add Employee. Walk through the form completing the information in each section, including the information from their W-4.



6. In the field How much do you pay New? choose from Hourly, Salary or Commission Only. You will be prompted to complete the amount of their Hourly, Salary or Commission. You can add additional pay types such as overtime, holiday, etc.

7. Choose how the employee receives their pay, Check or Direct Deposit, then complete the withholding information and add any additional deductions or additions. These can include wage garnishments, health insurance, etc. You are given the opportunity to review your information in one screen.



8. Determine if previous paychecks were given to this employee. If so it will be necessary to record this information.

Once this information is completed for each employee you are ready to run payroll.



PAYROLL SERVICE KEYS

Payroll Service Keys are very important in the offerings inside of QuickBooks Desktop. They give QuickBooks the ability to calculate the payroll taxes and process the payroll forms, if you are using a service that offers these functions.

There are two methods to add a service key. They’re dependent on whether you, the accountant, will be processing payroll through your existing payroll service, or your client will process their payroll directly through their QuickBooks.

If you are going to add the client to your subscription of Enhanced Payroll for Accountants to process payroll, using your service key you will bring the client’s QuickBooks file into your copy of QuickBooks Accountant Edition. When you perform any payroll functions for that company, it will prompt you to add this company to your existing subscription by inserting the Service Key Number.

If the client is running their payroll using either Enhanced or Assisted Payroll, they will go to the Employees drop-down menu and select My Payroll Service Manage Service Key. This will allow them to add the service key for their subscription to begin payroll setup.



SET UP PAYROLL PREFERENCES

Preferences in QuickBooks is the location where you pre-set your global defaults.

To set up preferences, go to Edit Preferences Payroll & Employees on the left. Note that there are no personal preferences for payroll. Click on the Company Preferences tab at the top.

This is where you set your desired payroll preferences, as well as turn on or off the payroll feature.

There are some important preferences you will want to attend to, such as:

• Sick and vacation settings

• Job costing and item tracking

There are other preferences that make processing payroll easier, such as:

• Set employee defaults

• Pay stub print options

• Display of employees in the list

• Auto recall of data is also pre-set here

When the payroll feature is turned on, QuickBooks automatically adds Payroll Liabilities and Payroll Expense accounts to the Chart of Accounts.



The Employee Defaults button allows you to set up a base of standard items that will populate for each new employee: items such as hourly and overtime wage, state information, union dues and uniform allowances. This saves time as each new employee added will have a standard base filled in automatically as a starting point.



While you are setting your preferences you will also want to set the preferences for Time & Expenses. Again there are no personal preferences, so select Company Preferences. Set the preferences accordingly. By adding the time tracking preference, you turn on the ability to use time data to create paychecks for the employees, and track the time against customers and jobs.



SET UP USER ACCESS

Setting up user access is an extremely important step in keeping your employee data secure.

Step-by-Step: Set up User Access

1. From the Company drop-down menu select Users Set Up Users and Roles. For Payroll and Time Tracking you can skip through two screens to the Time Tracking setup.

2. If you want this user to be able to work with time tracking, you will give them either Full Access or Selective Access. If you choose Selective, you can determine if they should have the ability to create transactions only, create and print transactions, or not only create the transactions but also create reports tied to those transactions.



3. The next screen is for Payroll and Employees. The options are the same as on the previous screen.

4. There is one more screen you will address, Changing or Deleting Transactions. In some cases, you might give users complete control over company data. If this is the case, you would give them the ability to change or delete transactions in all areas. However, in other situations, you would like users to create transactions but want to verify at a managerial level that any changes or deletes are valid, so you would take away the ability for changes or deletions.

The second question on this screen is regarding changes made after a closing date has been set in the file. This was covered in an earlier module.



5. Once these decisions are made and the radial button checked, you can finish your setup. The user is ready to log in and go to the next steps in the setup of payroll.

SET UP PAYROLL ITEMS

QuickBooks uses payroll items for anything that affects an amount on payroll checks and for company expenses related to payroll. After turning on the payroll feature in QuickBooks you can add payroll items to the Payroll Item list as needed. The names of the payroll items are what you'll see on paychecks, in the After-the-Fact Payroll window and in payroll reports.

There are several steps to take when setting up payroll. The first step is to set up the Payroll Item list. This is how QuickBooks determines where on the General Ledger to record the payroll transactions. It allows you to utilize various types of pay while allowing them to affect different General Ledger accounts, sometimes called mapping.

There are several Payroll Item types:

• Yearly Salary

• Hourly Wages

• Bonus

• Additions

• Federal Taxes

• State Taxes, etc.

This list is referenced several times during the setup.



CUSTOM SETUP OF PAYROLL ITEMS

Before you actually start setting up the payroll items, you will want to check for subaccounts in the GL. Subaccounts give more meaningful information on the financial statements. Subaccounts can be set for both the liabilities and expense accounts.

Now you are ready to add Payroll items. There are two choices of setup processes, EZ Setup and Custom Setup.

Both can be accessed from the Employee drop-down menu Manage Payroll Items New Payroll Item.



The EZ Setup uses standard settings, which is the recommended setup for most users. EZ Setup does the work for you and, if you want something a little different, you are always able to go back into the Payroll Item list and adjust the item.

If you are very familiar with payroll, you can start with the Custom Setup option.

Step-by-Step: Custom Setup

1. The first screen in the Custom Setup option offers seven types of payroll items. For example, you can choose Addition.



2. Name the payroll item.

3. If you would like to track this payroll item By Job, check the box in the window.

4. Choose the appropriate expense account you want to be affected by this payroll item.

As this is an employee loan, you would use the Employee Advances account. This account should be an Other Current Asset type.



TAX TRACKING AND MAPPING PAYROLL ITEMS TO THE CHART OF ACCOUNTS

Step-by-Step: Set up Tax Tracking

1. Set up the Tax Tracking type. Because this is a loan and there is no tax associated with it, select None.

NOTE: If you choose from the different options in the drop-down list, you will be given different information on the bottom half of the screen. This step is important because it determines where this item appears on the tax forms, so you want to make sure it is correct.



If you chose Compensation, the information on the screen would change, showing which tax forms are affected by this item.

2. The next screen lets you change the settings for which taxes are affected by this payroll item. If you need to adjust the taxability of the item, you do so here.

An important save here is if you are editing the item and making changes but can’t remember what the default settings were, you can click the Default button and it will restore the standard settings.



3. A payroll item can be set up to calculate based on quantity, hours, percentage of net or gross, or a flat amount per paycheck. This can be important when paying employees.

A default rate with limits may be set. If all employees are paid a standard rate, it can be set up here.

4. You can then decide if this payroll item should be calculated on gross or net pay.

If there is a global limit that employees will reach for a particular item, a rate and limit can be set.



These defaults can be set up and, if an employee has exceptions, you may go into their individual employee record and change their personal defaults.

Once your payroll items are set up, you will want to review the list to make sure that:

• The accounts are mapped correctly

• The payee is correct for each payroll liability

• The account numbers are complete and correct for the taxing agencies or vendors

The Payroll Item list allows us to view how payroll actions affect the General Ledger.

Step-by-Step: Review Payroll Item List

1. Go to Lists Payroll Item List.

2. To choose which information you want to view in the Payroll Item list, you can customize the screen. Click Payroll Item Customize Columns.

3. You are able to add columns to the list, such as the Expense and Liability accounts, to make sure they are also mapped correctly.



4. To make an adjustment to a payroll item, double-click on the payroll item in the list. It will open up so it may be edited.

NOTE: There are a few differences on tax items where there is both a company share and an employee share.

In an item such as Medicare, you will find it shows one screen for both the company-paid portion and employee-paid portions.

5. The next screen looks at the agency that will receive the funds, such as the IRS. In this case, the tax deposits are made through the company’s bank. The items are mapped to the Liability account using one account for both the company and employee portions. They could be separated into subaccounts if you wish.



6. On the next screen you will choose the expense account you want affected by the company’s expense. As this is an item where the government sets the rate, you don’t have an option to change it. If this were a rate that was different for each company, you would have an opportunity to change it on this screen.

7. You can also choose which payroll items are subject to this tax if necessary.



PAYROLL SCHEDULES

The payroll schedule in QuickBooks defines when you should run your payroll based on a pre-determined time frame.

You can use the payroll schedule to group employees in whatever way makes sense for your company. For instance, some companies might pay their hourly employees weekly and pay their salaried employees twice a month.

Using the payroll schedule allows you to pre-set each employee into a group and not need to think about it each time you run payroll.

Step-by-Step: Edit Payroll Schedule

1. From the Employee drop-down menu select Add Edit Payroll Schedules. There is a window with the current list.

2. To set up a new schedule for hourly employees paid weekly, click Payroll Schedule New.

3. Give the new schedule a name then choose one of the pre-set schedules from the drop-down list. The next two fields specify how QuickBooks will determine when these employees should be paid.

4. If the pay period ends every Saturday, choose the next Saturday coming up. Then choose the Date employees will be paid for that period.

Depending on the payroll service you use, you will probably want to process your payroll two business days before it is due. Be sure to take this into consideration when setting up the pay schedule for your employees.



SET UP EMPLOYEES’ PERSONAL AND PAYROLL INFO

Now you are ready to set up your employees.

An employee in QuickBooks is someone who receives a W-2 from you at year-end. They receive paychecks and have taxes withheld from them.

When setting up payroll preferences, you were able to set up some employee defaults, which save time in entering employees.

Step-by-Step: Enter Employees

1. From the Payroll Center select Employees New Employees. This opens the screen where employee information can be recorded.

2. In the Personal tab, you can record the employee’s information such as name, Social Security number, date of birth, etc.

3. Their contact information will be recorded in the Address & Contact tab.

4. Under Additional Info you can record an employee’s account number. You can also designate a special billing rate level for an employee. For instance, if you normally bill your clients for employee time at a rate of $20, but want to bill this employee out at $30, you can choose a billing rate level that is custom for this employee. The details on this will have been covered in a separate module.

You can set up custom fields to keep track of information such as their spouse’s name or the date of their last raise, etc.



5. The Payroll Info tab is where you will designate the payroll schedule for the employee, and set up their earnings, deductions, withholdings based on their W-4, direct deposit and sick/vacation time. If the employee is paid from time entered in the time sheets, you will want to check the box Use time data to create paychecks.

6. If the employee is covered by a Qualified Pension Plan you will check that box.

7. Under Employment Info you can keep track of hire dates, release dates and the employment type: regular, officer, etc.

If you have the payroll service keep track of Workers Comp, you would set it up for this employee by putting in their comp code. This is not covered in detail in this module.

USE THE PAYROLL SETUP WIZARD

Once the employees are set up you might have to enter year-to-date payroll information. If they have been paid through another service or manually in the calendar year, this will ensure their annual W-2s will be correct and your payroll reports and tax returns will be accurate in QuickBooks.

Begin again at the Employee drop-down menu. Choose Payroll Setup. This opens up the Payroll Setup Wizard. Note that the first few boxes are checked. This is because those items were set up manually in earlier steps.



ENTER PRIOR PAYCHECKS AND LIABILITY PAYMENTS

Step-by-Step: Enter Prior Paycheck and Liability Payments

1. Click Year-to-Date Payrolls on the left. First determine if you need to record year-to-date payroll figures. You will walk through some steps asking questions to verify that you indeed do need to add year-to-date payroll figures at this time.

2. If paychecks have been issued in this calendar year, click Yes.

3. A window will open that allows you to enter each employee’s pay history in one place. If you need help, click Show Steps and it will walk you through the data that needs to be recorded.

4. After you have completed recording prior paychecks, record any tax payments that have been made in the year by clicking Edit. A window opens up that allows you to record past payments easily for the year. You need to be very careful in checking that these numbers are accurate so future liabilities come up correctly.

You can also record payments for items that run through payroll but aren’t paychecks or liability checks, such as employee-paid health insurance, workers comp, withholding orders, etc.

There is just one more step before you are ready to run payroll.



USE PAYROLL SETUP WIZARD TO SET UP SCHEDULED LIABILITIES

The payroll tax liability schedule will need to be set up so you pay your liabilities according to the demands of the state and federal government. Different companies are required to pay their liabilities at different times. You need to let QuickBooks know your schedule so you may easily avoid late payment penalties and interest charges.

Step-by-Step: Set up Scheduled Liabilities

1. From the Employee drop-down menu select Payroll Taxes and Liabilities Edit payment due dates/methods. This opens up another Payroll Setup Wizard for Tax Payments.

2. Choose each of the liability types to edit. For instance, if you pay your federal tax deposits for 941/944 or 943 items monthly, click on the item in the list, then click Edit and the screen opens up for you to adjust.

3. You can change whom you pay and how often and if you have a payment frequency that is different from the standard ones, you can choose to set up a custom frequency. Click Finish and move on to the next payment item.

4. When you have gone through all of the tax payments, you can adjust any other benefit and payment items, such as health insurance, retirement plan payments, etc.

5. When you have completed the setup, click Finish and you are ready to run payroll!

Supplemental Guide – QuickBooks Desktop 2017 Certification Course Topic 3: Prepare Payroll


Topic 3: Prepare Payroll

PROCESS PAYROLL

Process Payroll in Intuit Online Payroll for Accounting Professionals

Step-by-Step: Process Payroll in Intuit Online Payroll

1. To begin a payroll run, start by logging into IOP4A. Choose the client then click the Payday tab.

2. In the Create Paychecks screen, choose the Check Type: regular, bonus, etc.

3. Verify the Pay Period and Pay Date.

4. Input the time worked, adding any additional items such as bonus or commissions.

5. Choose Create Paychecks.

6. Verify your data entry is correct on the next screen, then choose Approve Paychecks.

7. Print or send pay through direct deposit.

8. Choose to print or email pay stubs.



Payroll Processed in QuickBooks

Beginning a payroll run starts with selecting the payroll schedule you want to process.

Step-by-Step: Process Payroll in QuickBooks

1. In the Payroll Center, click the Payroll tab, and the Pay Employees tab on the right. Choose which payroll schedule you are paying at this time or choose Start Unscheduled Payroll.

For example, if you want to pay your employee a bonus outside of their normal pay period, go with an Unscheduled Payroll in the first window.



2. When you choose Unscheduled, all of your employees are listed so that you can check whom to pay (or Check All).

3. Verify the Pay Period Ends date is correct for this payroll run, and that your Check Date is accurate.

4. Make sure you are using the correct Bank Account. Note that it will tell you how much is available in your bank account so you may determine if you have enough to cover your payroll.

5. You are also able to sort your employees in various manners, based on the data for the employees. You can customize the columns on the grid by clicking Show/Hide Columns, which is important if you are going to use this screen to input pay.

6. Choose which employees to pay by putting a check mark next to their name.



7. There are two ways to record what you are paying employees. You can adjust employee hours or salary directly on this screen by typing a figure in columns.



8. If you would like more options to adjust an employee’s paycheck, click Open Paycheck Detail. This opens the window Preview Paycheck. You can adjust, add or delete any payroll items to their paycheck as well as add Other Payroll Items. For instance, you can remove the Health Insurance adjustment, as this requires an extra check and you wouldn’t want it taken out of this pay. You can also add an item such as Mileage Reimbursement or Commissions.



9. You can also adjust the federal or state withholding if the employee so directed.



10. You can enter a net check and have QuickBooks calculate the gross check from it by checking the Enter Net/Calculate Gross box.

11. If you offer direct deposit and this employee is set up to receive their paychecks thusly, check the Use Direct Deposit box.

12. Once you are done making any additions, deletions or adjustments you can either click on Save & Next if you have more employee checks to review, or Save & Close if you are finished reviewing paychecks. You will come back to the Enter Payroll Information screen. When you have verified your information, click Continue.



13. This next screen, Review and Create Paychecks, allows you to verify the bank account chosen, how many paychecks you are processing and choose how the paychecks will be written. You can choose Print Paychecks from QuickBooks or Assign Check Numbers to Handwritten Checks. If you choose the latter option, you are then able to record the first paycheck number you have written. You can also verify which employees are going to receive Direct Deposit as there will be a check mark in that column.

14. When ready, click Create Paychecks.

15. A confirmation screen will come up. From this Print & Distribute Paychecks screen, you can Print Paychecks or if using direct deposit or handwritten checks, Print Pay Stubs.



EMAIL PAY STUBS

If you chose Print Pay Stubs you will be brought to the Select Pay Stubs screen.

Step-by-Step: Email Pay Stubs

1. From here you can choose to Print or Email the paystubs. You can choose employees who received paychecks, direct deposits or have the list populate for both choices. You are able to set up default email text so that you do not have to change the emails each time you send them.

2. You can choose the employees by checking their name off in the list, or by choosing an employee from the drop-down list. You can choose the Date Range of paychecks.

3. Emailed pay stubs are password-protected. You will want to make sure your employees understand how to enter their password, which is the first four letters of their last name and last four digits of their Social Security number.

You have paid your employees!



PAY PAYROLL LIABILITIES

Your employees have been paid and now you have to pay the liabilities associated with that payroll run.

In Intuit Online Payroll for Accounting Professionals you will see a Client Tax To Do’s list. This can be accessed from the drop-down list. Select Client Tax To Do’s, or check the box at the bottom of the screen. You will see it when you sign in.



To pay a client’s taxes you may choose from the list above, or choose your client from the drop-down list. Choose the Taxes & Forms tab Pay Taxes option. Click on Create Payment and process your payments. Payments can be either e-paid or printed and mailed.

If you are processing your payroll inside QuickBooks using Enhanced payroll you will need to direct QuickBooks to process these liability payments. To do so, go to the Payroll Center Payroll tab on the left and Pay Liabilities on the right.



It is important to use this function to pay these liabilities versus writing a check in QuickBooks. This feature is how QuickBooks is able to record the amounts due and paid to generate the tax returns and reports required by local, state and federal governments.

Liability payments may be made either by check or e-payment. If you wish to pay by e-payment, you will need to set this up with the receiving entity.

NOTE: You are informed regarding what is due or overdue and the actual due date. You can use this information to pay the liabilities before they are due, but also keep track of what is coming up so you may manage your cash flow, as necessary, by not paying before the liability is due.

1. To choose an item to pay, check off the item in the list. Note that as you check off items, there is a total figure populated at the bottom of the window so you may decide which items to pay if you can’t or don’t want to pay them all at one time.

2. Once the determination of which to pay is made, click on View/Pay. This opens up the Liability Payment check so you may review it for accuracy.



3. You may print the checks individually or wait until you have reviewed all the checks being paid. Once they have all been reviewed, a Payment Summary window will appear allowing you to print all the checks and a summary.

4. You are also able to pay unscheduled liability payments by choosing Create Custom Liability Payments through the Employee drop-down menu.



IDENTIFY AND FIX PAYROLL LIABILITY ISSUES

What do you do if your payroll liabilities are incorrect in Enhanced or Assisted Payroll?

For example, the Pay Liabilities screen shows there is health insurance owing, but in fact it has been paid. Or perhaps upon comparing the Payroll Liability balance for a given date with the Payroll Liability amount from a Balance Sheet report for the same ending date, you find they are different.

You will want to determine if the liability was paid by writing a check instead of being processed through the payroll liabilities.

If this happened, you have some options as to how to fix the issue. The first is to use the Client Data Review option. This was covered in a different module, so won’t be covered here.



Another option is to leave the check that was written and adjust the liabilities so that going forward they show the correct amounts owed.

1. To do so, choose Adjust Payroll Liabilities from the Payroll Center’s Pay Liability screen.

2. Choose the Date of the adjustment, most likely on the date the discrepancy began. Choose if the adjustment is for a Company or Employee liability, and also if you want this adjustment to affect the liability and expense accounts.

3. If a check was written for health insurance and coded to the payroll liability account, this amount would be reflected in the balance sheet account correctly; a credit when payroll was run and a debit when paid by check. If you choose to have this adjustment affect the liability account, it will reverse the initial credit, which would be incorrect. So in that case, you would choose Do not affect Accounts.

4. Next choose the Payroll Item to be adjusted, either by using the drop-down list in the Item Name Column or by typing it in directly. Record the amount of the adjustment, with a positive number if increasing the liability or a negative number if decreasing it.

5. Click OK and the adjustment is complete.



GENERATE REPORTS FOR STATE AND FEDERAL PAYROLL TAX RETURNS

Assisted Payroll and Full Service Payroll will generate your payroll tax returns for you. Basic Payroll service does not provide these forms; however, Enhanced Payroll does.

There are two ways to access tax forms: one is from the Employees drop-down menu, by selecting Payroll Tax Forms and W-2s Process Payroll Forms, or by choosing File Forms from the Payroll Center.

1. The first screen lets you choose whether you are filing a federal or state form. You then choose which form you are filing. The screen will take you through an interview process to answer the questions needed for the form that Intuit doesn’t track.



2. At the bottom of the form you will have the option to Save the form to a PDF, Print the form, Check for Errors or Submit the Form, which can be done by e-filing.

3. Before the form can be submitted it is automatically checked for errors. If there are errors, you will be directed where to find them. You can click on the error in the report and it will bring you to the spot on the form that needs to be fixed. Any errors will need to be fixed before the form can be finalized and e-filed. The form may be printed with errors if you need it for reference to gather the information to fix it.

4. Depending on the government agency’s requirements, forms may be printed and mailed or e-filed.



CLIENT-READY PAYROLL REPORTS

You might want reports from QuickBooks for several reasons, such as, you are manually going to prepare the payroll tax returns, you are completing a workers’ compensation audit, or you process payroll for your clients and send them reports after each payroll run.

There is a comprehensive list of standard payroll reports available.



Also available is the ability to extract payroll data, as requested by most states, into a report in Microsoft Excel®.

Some of the reports you may obtain through Excel are:

• Employee Journal

• Rates and Hours by Job

• Quarterly Employee Summary

• Employee YTD

• Hours Summary

• Deferred Compensation

• 8846 Worksheet

• Calculated Percentages

• YTD Summary 1 and 2

Supplemental Guide – QuickBooks Desktop 2017 Certification Course Topic 4: Time Tracking


Topic 4: Time Tracking

Time tracking is an important function of payroll.

TRACK EMPLOYEE AND VENDOR TIME FOR JOB COSTING

When you track time in QuickBooks you can:

• Have the time filled into the hours on a paycheck so there is no double-entry required

• Transfer the time to customer invoices, again saving you from double-entry

• Track billable and non-billable time, which can help in tracking employee profitability, which also helps in estimating the cost of future jobs

In order for time tracking to work, you need to allocate your employees’ time to your customers and jobs.

Do this by using the Single Activity window or the Weekly Timesheet window.



You are able to toggle back and forth between these two windows. They offer the same information fields but in different views.

Most commonly, the Single Activity window is used as a timer or stopwatch to track the actual time worked; the Weekly Timesheet window is used after the time is spent.

You will note that the Weekly Timesheet window is for recording total times by date and is displayed in calendar view, not by pay period. The starting date is determined in the preference settings you looked at earlier. This can be helpful when multiple people work on the same project.



SET UP EMPLOYEES FOR TIME TRACKING

While salaried workers don’t work by the hour, you may still want to know how they are spending their time and if that time is billable or not.

Salaried employees can use the Weekly Timesheet window, Single Activity window or their time can be added directly into the Paycheck window.

The Weekly Timesheet and Single Activity windows can be completed as the employees are working throughout the day, which makes it easier to capture all the time spent, whether on customers or office duties.

When using either format you want to enter the employee’s name, choose the week then begin recording time spent.

You will choose or type in the name of a customer, choose the activity or item from the item list (which you learned about in a previous module), add any notes that are relevant to the job at hand and the hours spent each day. You can also mark if this is billable to the client; if not, uncheck the box.

If you add to the Notes column when you bill this customer for this time, you can choose to have these notes transfer to your customer’s invoice.

ALLOCATE HOURLY EMPLOYEE EXPENSES TO CUSTOMERS AND JOBS

In setting up an hourly employee to allocate their pay to customers and jobs, make sure the employee is set up for Time Tracking. In the employee setup, make sure Use Time Data to create Paychecks is checked.

The method for allocating hourly employees’ expenses is much the same as discussed above for salaried employees. The difference is on the Weekly Timesheet window where there is an additional column asking for the payroll item associated with this time.

This gives the ability to pay the employees for different functions and different activities. For instance, when the employee works on framing they may receive regular pay, but if they work on a high-risk job they may get hazard pay which is at a higher rate. You are able to populate that information on this screen so you won’t have to make an adjustment in the Payroll window, where you might not remember that the job they performed earned them a different rate.



REPORT ON TIME AND EXPENSES

There are numerous reports available for Time and Expenses. The most commonly used are the Job Profitability Summary and the Time by Job Summary.



The Job Profitability Summary report summarizes how much money your company has made to date from each customer. If your company did multiple jobs for a customer, the report shows subtotals for each job. Payroll information will be reported with the actual cost.

The Time by Job Summary report shows how much time your company spent on various jobs. For each customer or job, the report lists the type of work performed (service items).

Supplemental Guide – QuickBooks Desktop 2017 Certification Course Topic 5: Payroll and Time Tracking Tips


Topic 5: Payroll and Time Tracking Tips

Let’s now look at some items that may not be in your everyday tasks, but are helpful nonetheless.

AFTER-THE-FACT PAYROLL

Sometimes clients end up writing checks to their employees and you have to record the data in QuickBooks after the fact. Or you have a client who always prepares their own payroll checks, but asks you to prepare their tax returns.

To enter these checks in Enhanced or Assisted payroll, use the After-the-Fact Payroll function.

You want to make sure your payroll and employees are set up as discussed earlier.

1. You access this function through the Employee drop-down menu, or in the Payroll Center under the Pay employees tab.

2. Using the records of what was actually paid, choose your employee and record gross amounts for each paycheck or you can have QuickBooks copy the wages and withholding from the last paycheck entered for that employee by selecting the Copy earnings details from previous Paychecks checkbox in Payroll Preferences.

3. If you record the gross amounts manually, QuickBooks will automatically calculate and fill in all withholding amounts using the associated tax information for the employee based on the gross wages. If you find the withholding amounts don’t match the actual paycheck, adjustments can be made manually on the input screen.

4. If after you input the data, QuickBooks finds it to be out of balance, an error window will pop up and allow you to adjust the entry by having QuickBooks adjust federal or state withholding, or it will let you make a manual adjustment.



REPLACE LOST OR DAMAGED PAYCHECKS

If an employee loses or damages their paycheck, you do not want to use the normal Void feature in QuickBooks then create a replacement check using the Pay Employees window. The new paycheck can have slightly different withholding calculations and the year-to-date figures will not be the same as they were on the initial check.

Instead, you will create a new regular check (using the Write Checks window) with the same date, number and payee as the original paycheck. Use Payroll Expenses as the account.

Next Void the regular check, then reprint the original paycheck with the new replacement check number.

This keeps the original information in the payroll module, and reprints a check for the employee to take to the bank.

RECORD EMPLOYEE LOANS AND LOAN REPAYMENTS

Oftentimes you find yourself loaning money to your employees. You want to be able to track how much you lent your employees and how much they have repaid. You don’t want to worry about remembering to adjust each paycheck for the repayment, and you don’t want to worry about when to stop taking payments. The following steps resolve these issues.

You will need two things set up in QuickBooks.

1. In the Chart of Accounts set up another Current Asset type account called Employee Loans.

2. In the Payroll Item list set up a Payroll Deduction item called Loan Repayment that is linked to the Employee Loans account that you previously set up.

3. When the funds are loaned to the employee, a check should be written using the Employee Loans account. You want to have a previous agreement with the employee about a payment schedule.

4. Once you have that information, go to the Payroll Center Employee tab and double-click on the employee’s name, click on Payroll Info and add the deduction under Item Name. Record the Loan Repayment item, the amount agreed upon and the total amount of the loan. This will be the limit, which lets QuickBooks know not to deduct more than that amount in total.



ADJUST W-2S AND 941S

At some point in time you might find the need to make adjustments to a W-2.

1. Employee Center Process Payroll Federal Forms Annual Form W-2/W-3 – Wage and Tax Statement/Transmittal.

2. Choose the tax year and employee then click Review/Edit.

3. Right-click on the amount to be adjusted and select Override. Change the amount then Save and Close.

At some point you might find that the 941 doesn’t match the Payroll Summary report.

You will want to review both and compare them to one another. Once you find where your discrepancy lies, you are able to go back through the same steps learned earlier on creating a 941. By opening the form you processed earlier, you can make any necessary changes.

PAY COMPANY AND EMPLOYEE EXPENSES

Use Payroll Items

When you have expenses that are shared with an employee, such as medical insurance, there are a couple of ways this can be handled. It starts with the employee’s share being withheld on their paycheck and the company paying the balance.

In QuickBooks, there are two ways to handle this situation. The first option is to link the employee deduction payroll item to an expense account by choosing the expense account on the Payroll Item Setup screen. Then split the employee- and employer-paid portions on a regular bill or check. Use Write Check, entering the full amount of the bill, using the same expense account mapped to the payroll item. The resulting net expense equals the gross amount paid, less the payroll deductions from the employees.

Pay as an Expense

The alternate method is to add the company-paid portion to the payroll liability check. This is usually paid the first of the month and will not show as a liability until the employee is paid. To pay the insurance company, use the Pay Liability function. Once the liability check is open, click the Expense tab and add the company’s portion of the bill there using the expense account for that expense. Once the dollar amount is in, click on Recalculate, found in the top ribbon, for the check to reflect the entire amount of the bill.

Supplemental Guide Guide Conclusion


Guide Conclusion

You have just completed Module 7: Set Up and Using Payroll and Time Tracking. This Supplemental Guide, in tandem with its recorded module, has been provided to help prepare you for the QuickBooks for Desktop Certification Exam. Continue on to the remaining modules and their related guides and then proceed to the certification exam.

By completing this module, you should be able to:

• Determine the payroll solution that is best for your client

• Distinguish the benefits of Intuit Full Service Payroll

• Identify features of the Payroll Center

• Specify the information required to set up payroll

• Determine the steps in setting up Intuit Online Payroll for Accounting Professionals

• Recognize the steps to use Payroll Service Keys

• Recognize the steps to set up company preferences and user access

• Identify the steps to set up payroll items, employees and schedules

• Recognize the steps to enter accurate year-to-date pay and liability payments

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