This was super super helpful! Thank you so much. Also thank you for recording in awesome quality and using a good headset made it much easier than most other videos.

@nerdenterprises

3 жыл бұрын

Thank you Chevy! I love your movies ;)

Thank you for this video! The workflow I was originally using before finding this video was all wrong in how I was entering this in QBO. I use a third-party payroll company and this video was super helpful in correcting the workflow and easy to follow along.

@nerdenterprises

Жыл бұрын

Thank you for commenting. I am so happy this was helpful!

Love your channel, clear and easy to understand, thanks so much

@nerdenterprises

Жыл бұрын

Thank you! This is always nice to hear!

I am using your method thank you! on the memo Im adding some details - Thank you !!

Very informative. Thank you I learn so much.

Thank you. I've learned a lot from this video.

Thank you for the clear explanation!!

Excellent video, very clear. Thank you!

@nerdenterprises

2 жыл бұрын

Glad it was helpful!

Thank you for this video. I found it helpful.

@nerdenterprises

3 жыл бұрын

Thank you for commenting. I really appreciate it!

Thanks for the video. I am new to QB Online and m struggling getting payroll entered. I have 3 questions: 1. How does the process differ for pay checks that are cleared from our bank account? Our payroll company cuts checks but then those checks are deposited against our account? 2. So secondly, how do I enter payroll under these circumstances? 3. Some of our employees are tipped. They are paid out in cash daily but need to claimed as wages ( we are in California), so they pay taxes on those tips. I cannot find any information for these types of employees. Any help is greatly appreciated!

you are the best, keep doing the best work

@nerdenterprises

3 жыл бұрын

Thank you Sonia!

thanks! great info !

Great simple video. Just what I needed! Instead of creating a check, could I split the transaction that I see in the bank feed?

@nerdenterprises

3 жыл бұрын

Hi! yes you could. That would in effect be creating a check!

Thank you, THANK YOU!

@nerdenterprises

Жыл бұрын

Thank YOU!

What would be the difference, if adp besides paying the taxes (direct withdrawal) generates paper paychecks? In other words, no direct deposit.

Hello. I love your broadcasts! How can we produce accurate W2's if we process the payroll with the summary methods under Liabilities and Expenses? Some payroll is processed through outsourcing and some is processed through QBO. The QBO paystubs and W2 information will only reflect what's been processed through QBO. I have two clients with this issue currently and it is very time consuming importing all of the information for QBO payroll to update employees y-t-d information. Am I missing something...?

@nerdenterprises

5 жыл бұрын

Hi. Using the summary method (and assuming all payroll is through a 3rd party) your W2s and W3 will be handled by the 3rd party. If I understand correctly you are using a third party for some of the payroll and QBO FS Payroll for some? Normally I would never allow a client to do this. I can't imagine why you would. It seems to me you have to choose one service, and cancel the other. Then get the YTD info from the cancelled service over to the surviving one.

Do you create a fictitious vendor for these?

hello, how come you didn't add payment method? to the expense transaction? no reference ?

Would you please tell me why the Dep Care EE expense account have negative balance? Again ,you didn't pay Simple IRA Payable which was recorded in first check.Why?

New to qbo. In a S -corp with only president & secretary. No direct deposit. How can we enter ADP payroll transactions. They pay the taxes. How can we enter payroll into qbo? No bank nor adp feeds. Thanks!

How do i account for the deposited checks once they get in to my bank feed? thank you for the help, great videos (y)

@nerdenterprises

4 жыл бұрын

If you have checks that are not direct deposit then those need to be recorded individually with the Gross Pay and Withholdings taken out so that the check arrives at the net pay. Those can be recorded directly in the check register, or you can record them in the Payroll clearing, and then when they clear the bank account just book that net amount as an offset to payroll clearing.

@misskristinn

Жыл бұрын

@@nerdenterprises Hi! Have you made a video about this yet? I'm currently trying to wrap my head around how to record non-direct deposit checks & EE/ER health insurance contributions. Would love and really appreciate a video on this! Maybe a part two? Thank you so much!

Very helpful! I'm taking over the books for a non-profit and the current bookkeeper DOES use a journal entry to enter payroll. What are the pros/cons? Is it that she doesn't have to make the offsetting entry for payroll liabilities?

@kristynichols6283

3 жыл бұрын

Wanted to add, since it's a nonprofit, we do use classes to tie things back to specific programs/grants. Does that have anything to do with it?

@nerdenterprises

3 жыл бұрын

@@kristynichols6283 Hi Kristy Journal Entries don't show up as nicely in reports, but they get the job done. Classes can be used either way, so that's not an issue.

This was incredibly helpful--I'd tried and failed to figure out the journal entry method of recording payroll, so I was so happy to find your easy to follow instructions. I ended up creating a fictional bank account for Payroll Clearing and recording checks and expenses in that account, then I post the bank transactions, when they clear, against that account. When I sent my balance sheet to my accountant, his only feedback was that my Payroll Clearing Account should be listed as a liability instead of an asset. But it doesn't appear there's a way to do that if Payroll Clearing is an actual bank account. Thoughts?

@nerdenterprises

5 ай бұрын

I think your accountant is confusing this account with payroll liabilities which is an entirely different account. This one needs to be a bank account so you can clear things properly.

Hi Nerd if I do payroll making payrun in quickbooks and doing pay through payroll clearing, is it meant to be zero once payments have been made? If it's not coming to zero do I have to do create a check or expense? So that the payroll clearing comes to zero, and how to reconcile it?

@nerdenterprises

3 жыл бұрын

Hi! Yes! The Payroll clearing has to zero out. If it doesn't then you have to figure out why, and fix it.

Thank you for a great detailed video on the manual payroll regarding the total sum amount! If the total tax payment is not made until after the end of the quarter, how can the employer tax be shown under the Other current liabilities? Once the transactions for the payments of Fed and State show up in the bank statement, how should it be categorized to zero out the Payroll Liabilities? Since the total Net pay is recorded as an expense in one check, how should all individual net paycheck transactions from the bank statement be categorized to prevent a double net pay amount? Thank you!

@nerdenterprises

4 ай бұрын

Hi! Once the liabilities are recorded, they stay there until they are paid. The payment of the taxes gets split between the Liability (employees' share) and the Employer Tax expense. That will zero out the liabilities. The net pay is not what is booked to an expense. That's the Gross Pay. The net pay is what comes out of the bank account after the withholding. If you use the payroll clearing account when you initially book the payroll, then you book the net checks that come out of the bank account against the clearing account and the clearing account should zero out. That's how you avoid double booking the net pay.

@antonsho5515

4 ай бұрын

Thank you for your reply! From what I have learned from your video, I am using the payroll clearing account to keep track of the total net pay and book the net checks that come out of the bank against this clearing account and this clearing account should be zeroed out. (even though in my case some checks are not cashed and this account still has a negative balance). Since the Employer Tax payment must be a portion of the Payroll Expenses, I also take a similar approach to have a separate clearing virtual bank account named ER Tax Payment to keep track of this amount. I created an expense for only the ER Tax portion so that the Payroll Withhold Liabilities still show under Other Liabilities. When the future payment for the total payroll tax is made, I will split that payment into two portions: One goes to the ER Tax Payment clearing account, and the other portion reduces the Payroll Withhold Liabilities to zero them out. Would this approach work well? I would like to hear your advice to have it done correctly. I appreciate!

If we use the summary report method,what do we do with the transactions in the bank feed (The check to each employee, the payments to EDD, the IRS payments, and payments to payroll provider?)

@nerdenterprises

9 ай бұрын

It all works the same as far as the taxes and the net pay for direct deposits. For the checks that clear individually you can record them each separately in your check register. If you recorded those checks individually in your clearing account, then you would record them in your actual checking account, but instead of splitting the gross wages etc... the entire amount goes against your payroll clearing.

I have QB Desktop pro plus and payroll desktop. If I convert to QB online, does my payroll convert as well?

@nerdenterprises

Жыл бұрын

You'll want to reach out to support to let them know you have payroll. The payroll has to be migrated to QBO Payroll, which is a separate process.

Hello there! I have a question, I just followed your example with our real payroll and everything has been matched. The only thing that is different is the payroll taxes. We have 3 withdrawals from the paychex on our bank account, one for the payroll fees, the second one for the payroll (this one matches) and the third one for the payroll taxes. Following the way on this video, there's a difference between the method on the video and the amount that they withdrawal. In this case, what could be the problem? The withdrawal es smaller than the total tax liability indicated on the payroll journal. Thanks!

@castlebookkeeping8491

5 жыл бұрын

Thank you I truly enjoy your videos and find them very helpful.

Out of curiosity, what is the detail type you picked for Payroll - Liabilities? Within Quickbooks Online, there is no longer an opp to add a new Detail, and Payroll Expenses is not an option.

@dericpeace5405

5 ай бұрын

I figured it out - Payroll Tax Payable. Thanks!

with the detailed method when payroll checks come through the bank feed of the company bank account do you categorize them to the clearing account?

@nerdenterprises

8 ай бұрын

Hi! Anything that will clear directly from the bank account can be recorded in the bank account. No need to use the clearing account. Some people just want to be 100% consistent with how they do everything so they will post these checks out of the clearing account. Then when they clear the checking account, they post them from the checking against the clearing. As long as the clearing account zero's out and the bank account reconciles, you're all good.

@cheri121975

8 ай бұрын

so when a client writes a payroll check it should match the feed if I write the check out of the company bank account that has all the details? Just making sure I understand correctly. Thank you sooo much for your help!! @@nerdenterprises

How do you handle when one lump amount is withdrawn from the account (from a PEO Payroll Company ....Justworks in my case?) I know that 'Employee Paid Deductions' (ie. EE portion of Medical Ins.) should be treated as a liability, but how do I offset it? These are the categories that Justworks breaks down on the "invoice": Gross Wages (+$), Employee Paid Deductions (-$), Employer Tax Contributions (+$), Employer Benefit Contributions (+$), Payroll Fees (+$). The 'Employee Paid Deduction' is what's throwing me off. Client does not pay the insurance, Justworks (PEO) does.

@nerdenterprises

4 жыл бұрын

That's completely different. It's not payroll anymore. You are leasing your employees, so the payment is an expense.

This is how my client recorded his (ADP) payroll transactions last year. He has a small consulting business which is incorporated. He used the check window to record the Gross Wages and Payroll Taxes and the Payroll Clearing account. (Note that the payroll taxes was a positive number and it was the employer taxes, not the employee taxes. The Payroll Clearing was a negative number.) The other transaction was a single entry equaling the payroll clearing amount. I didn't see any records of the Employee Witholding. Is that okay?

@nerdenterprises

Ай бұрын

It's hard to imagine his clearing account would clear if the salaries were recorded at the correct Gross amount. That means the deductions (liabilities) weren't accounting for. If it DOES zero out, then my concern is the salaries were recorded at the net amounts which is incorrect of course. So the real question is "how where the liabilities dealt with?" I've seen some setups where everything is run through the PR Tax account, so withholdings are recorded against the tax expense and then that nets out with the total tax payment also booked entirely to Taxes. This gets the job done, but it is very poor form (my opinion of course) (i.e.) not what I would call Bulletproof.

Hey Seth. You're awesome. Any thoughts on not recording liabilities at all, since you are using third party payroll. Just recording as an expense?

@nerdenterprises

3 жыл бұрын

Hi Jay. Thank you! If you only record the expenses, your banking won't reconcile. The payroll service is going to pull out Net Pay, and the Total Tax Payment. Neither of those amounts will tie to the expenses that you record, because of the payroll liabilities that are taken out. They also won't add up to the same total between the two. It just doesn't work that way.

@jayoneil4887

3 жыл бұрын

@@nerdenterprises Fix that with a journal entry?

@nerdenterprises

3 жыл бұрын

@@jayoneil4887 So much easier to just record the details. Gross Pay - Withholding = Net. Then Employer taxes + Withholding = tax payment. This way everything reconciles perfectly, and the withholding (liabilities) zero out every time so you have a good system of checks and balances. Now you know if liabilities doesn't zero out, something is wrong.

@jayoneil4887

3 жыл бұрын

@@nerdenterprises Thank you Seth!

@marketbuy

3 жыл бұрын

@@nerdenterprises I had the exact same thought as Jay which I wrote to you earlier today. Wouldn’t it be much easier to record directly as expenses for both employee/employer payroll expenses? I understand your logic for using payroll liability as a check and balance. For myself as the only employee (SCorp), I was thinking going directly to the payroll expenses. So much to learn......!

Hello, I have a follow up question on this. I have figured out how the company I work for can use your method with their outsourced payroll company report. However, I am lost about how to correctly categorize the net pay, impound, and other withholdings (i.e. insurance, 401k, etc.) charges that come through the bank. Do I categorize them under these payables that I used when writing the payroll check? Please advise.

@nerdenterprises

7 ай бұрын

The net pay is what is left after you account for the deductions and withholding from the Gross pay. Anything else like 401K etc.. has to be dealt with individually. the 401K deduction goes against gross pay, but instead of payroll liabilities it would go to some Pension Payable account. Insurance premiums are usually paid by the employer and booked to an expense, so any deductions from employees for insurance can go to the same Insurance expense account as an offset (reduction) to the premium expense. Effectively it is a reimbursement to the employer.

@emilyhanson8037

2 ай бұрын

@@nerdenterprises where and how in the payroll recording process do you record the insurance premiums part?

@nerdenterprises

2 ай бұрын

@@emilyhanson8037 If we're talking about "paying" health insurance premiums, that is usually done outside of Payroll. If we're talking about deductions from employees for insurance, my preference is to book those against the same expense account as when you pay the premiums, so it nets out to the employer's true expense.

Why did you have to create a fictitious bank account? why you just didn't proceed the same way as the original method?

Excellent! My only question is why use the payroll liability to enter in QB instead of going directly to the expense accounts to enter the expenses for either employee or employer taxes? It seems like entering the payroll liability is an added step. Thx

@nerdenterprises

3 жыл бұрын

I know you answered above, but to clarify my answer to this question another way, you actually couldn't do this accurately even if you wanted to. If you record the net pay to the expense account, your payroll expense is understated. The correct expense amount is the Gross Pay. Then if you record all of the taxes to an expense account, you are overstating the taxes, and it's not by the same amount as the Gross - Net pay. So your books will not be accurate.

@marketbuy

3 жыл бұрын

@@nerdenterprises I’m thinking out loud. As the only employee (SCorp) doing my OWN payroll, I would: 1). Record $12000 as my Q1 gross payroll salary expense 2). On the next screen (journal), record the employee payroll expenses 3) On the next screen (journal), record the employer payroll expenses Of course, I will have my Excel spreadsheet next to make sure all the numbers add up. Will this work ok without the payroll liability route? Thank you!

@nerdenterprises

3 жыл бұрын

@@marketbuy 1) The $12K won't reconcile in your bank account, because it's the net pay that comes out, not the Gross Pay. 2) The "employee payroll expenses" are not an expense to the company. They are a withholding from the employee's gross pay that the company has to send into the gov't. So this part can't go to an expense account. It needs to go into a liability, then out of that liability once it's paid. 3) The Employer expenses will come out as a payment in the bank, but for a larger amount (because it includes the employee withholdings). So this won't reconcile in the bank account if you only record the employer expenses.

@marketbuy

3 жыл бұрын

@@nerdenterprises You’re absolutely right! While I was eating my bagel, I went through the process in my head. My suggestion does NOT “net out” the salary as you said. Thank you thank you!

@nerdenterprises

3 жыл бұрын

@@marketbuy I love bagels! Especially with lox and cream cheese!

Do you have any experience with payroll relief and integration with quickbooks online?

@Monicamendezea

Жыл бұрын

Were you able to get a solution? I am on the same boat with payroll relief. 🥺 My mentor said stop suffering and go back to QBD

i tried to find your template for payrol entry on your website but i dont see it. Where can i find it?

@nerdenterprises

Жыл бұрын

Haven't had many requests so we did not include it on the last update of our website. We'll get it up and let you know once it's up. Bear in mind that this is not going to help you calculate payroll. Only to organize the information from your payroll reports (already calculated) to make it easy to record the info.

@bayareababe

Жыл бұрын

@@nerdenterprises yes I understand that. I actually was able to make the template myself. It’s pretty simple. I appreciate it though, as it lays things out easier for me to understand when calculating my payroll. Thanks :)

@bayareababe

Жыл бұрын

@@nerdenterprises I do have another question though- I use QBO and Paychex and the company is an HVAC company. I’ve not had much experience classifying payroll and I’m just wanting to understand how the classification works. Trying to understand our chart of accounts in QB where (at the top) there’s a line item called DIRECT LABOR-PAYROLL under the COGS account… and then (further down toward the bottom) where the rest of the payroll expenses (taxes, wages etc) are located. Is “DIRECT LABOR” classified under COGS because that’s where the employers portion (tax payments) go that come out of the employees checks? I hope I asked this question correctly and you can understand what I mean.

@nerdenterprises

Жыл бұрын

@@bayareababe Companies will often classify direct labor as COGS. In other words this is the payroll for the people actually doing the work for the HVAC company. This is likely distinguished from other salaries which will be in the Expenses section. Those would be the salaries for people who work in the office and the officer(s) of the company who aren't "hands on" with the actual HVAC work. The idea is you want to see those direct salaries against the revenue brought in, so you can see your Gross Profit Margin with those salaries included. It gives a more accurate picture on the profit and loss statement.

@bayareababe

Жыл бұрын

@@nerdenterprises ooooooh so it’s literally the labor of the installers who are on the payroll but their time needs to be subtracted into the cost of the revenue….got it! That was what was throwing me off because the payroll was split up like that. Thanks so much for explaining it to me!

u talking to much , please just tell us how to book it , thats it

@nerdenterprises

4 жыл бұрын

Thanks for the feedback!

@natalies7687

4 жыл бұрын

@@nerdenterprises I think you did great, I like the extra information. Though the client I am working on had a previous bookkeeper use journal entries instead so I am trying to figure out their method. I don't really understand the payroll clearing account and if you have a video on it that would be helpful!