QuickBooks Time Card Entry and Overtime Calculations – Beyond the Basics
Entering employee time cards in QuickBooks is the foundation for job-costing payroll in QuickBooks and issuing your employees paychecks – or at least it should be – especially if your employees work on multiple jobs or are paid a different rate of pay for different tasks that they perform.
Knowing how many man hours it took to actually complete a job or project is just as important as knowing the cost of having those employees on the jobsite.
Many business owners say that they “have all that information in their heads”, but I’ve found that actually having this information available in reports that you generate within QuickBooks helps you to analyze not only the profit of that specific job, but the overall profitability of your company and helps you to determine if you are bidding correctly. Of course your overall job costing reports will only be as good as the data that you enter in QuickBooks…but we’ll leave that for another article while we focus exclusively on entering time cards and calculating overtime.
In today’s busy workplace business owners and payroll administrators are faced with numerous challenges which cause them to want and need to be able to quickly and accurately enter employee time cards by “crew or group” by “job or project” and by day – because that is how they are done on the jobsite. Typically these needs result when employers have employees who:
- Work on more than one job during the week with different wage rates for each job OR
- Perform work under more than one type of work/trade classification in a single workweek, with different wage rates for each classification
Because of these situations, they also want software that will automatically calculate and distribute overtime hours worked for all employees on all jobs for any given work week – relieving them of the time-consuming and error-prone process caused by manual calculations and time card entries; this is an area where QuickBooks is lacking in functionality.
In addition to “normal” overtime laws that requires payment of overtime hours for hours actually worked in excess of 40 hours per week (sometimes when more than 8 hours a worked in a day); with overtime to be paid at one and one-half (1.5) times the average regular rate of pay; an increasing number of states are adopting the Federal Weighted-Average Overtime Rules, administered by the Fair Labor Standards Act (FLSA) and forcing employers in the construction, healthcare, and manufacturing industries to comply with these additional requirements.
This not only places an additional burden of time as well as far more complex mathematical calculations, which are far more likely to cause payroll errors, on business owners and payroll administrators. For example:
An employee works 50 hours during the workweek; 25 hours at $10/hr and 25 hours at $12/hr – the following calculation would need to be done to determine the employee’s gross wages using weighted-average overtime calculations:
- (25 hours x $10/hr) $250.00 + (25 hours x $12/hr) $300.00 = $550.00
- $550.00 divided by 50 hours (total hours worked) = $11.00/hr weighted-average rate of pay
- $11.00 + ($11.00 divided by 2) $5.50 = $16.50 weighted-average overtime rate of pay
- (40 hours x $11.00) $400.00 + (10 hours x $16.50) $165.00 = $605.00 gross pay
Manually applying and calculating this mathematical equation for multiple employees each week is an extremely time-consuming and error-prone task, often resulting in payroll errors, which must be done before time can be entered for job costing purposes and payroll can be processed in QuickBooks – this causes a great deal of frustration and dissatisfaction for QuickBooks users.
Many business owners and payroll administrators have and will continue to resort to Excel in order to track this complex situation, skipping QuickBooks Timesheet entries altogether and entering hours directly in the Create Paycheck window and loosing vital payroll job costing data.
Others will look for a new accounting package that will allow them to enter employee timecards by crew, job, and day and then at the end of the week it will automatically calculate and distribute overtime and/or weighted average overtime for them, but these accounting packages will have a much larger price tag than QuickBooks and they will loose the ease of use that QuickBooks does provide.
Sunburst Software Solutions, Inc., having worked for years with commercial/government construction contractors was prompted to solve this vital process for its customers and have developed a new program – “Crew/Overtime Entry Solution” in order to eliminate this pain point.
Crew/Overtime Entry Solution has been designed to specifically to increase a business owners or payroll clerks overall efficiency, saving time, and automating the time and overtime entry process which is extremely time-consuming. Having an automated process in place for these critical tasks will make you more productive; eliminate the error-prone process of manual overtime and weighted-average overtime calculations and allowing you to easily comply with FLSA requirements. This is accomplished through a few simple setup tasks:
- Teach Crew/Overtime Entry Solution about the overtime laws as they relate to your state.
- Choose one of four different ways in which the program can calculate and distribute overtime/weighted-average overtime.
- Make sure that your QuickBooks Payroll Item List is set up in a manner that Crew/Overtime Entry Solution can accurately do its job.
- Set up “crews” in the COES software.
- Enter time cards for the crews you set up, by job, by day in COES using all straight time hours and pay rates, then post this to the QuickBooks Weekly Timesheet – you can enter time for hundreds of employees with just a few mouse clicks.
- At the end of the week, retrieve your QuickBooks Weekly Timesheets and COES will perform overtime and/or weighted-average overtime calculations for you and then post the revised information back to QuickBooks in minutes, so you can process your payroll.
From within Crew/Overtime Entry Solution you can create “crews or groups” of employees, once these crews are in place you can enter time card information by crew, by day, and by job using all straight time hours, then post this to the QuickBooks Weekly Timesheet – at the end of the week, retrieve your Weekly Timesheets and COES will perform Overtime and/or “weighted-average” overtime calculations for you and post the revised information back to QuickBooks so you can process your payroll.
Key Benefits of Crew/Overtime Entry Solution:
- Teach the program about the Overtime laws your state requires.
- Create “crews or groups” of employees – employees can be assigned to the same group multiple times with different rates of pay OR employees can be assigned to multiple crews.
- Enter time by crew, job, and day; using ALL straight time hours – and post this back to your QuickBooks Weekly Timesheet.
- Enter time for hundreds of employees with a few clicks of your mouse.
- Overtime and/or “Weighted-Average” overtime is automatically calculated.
- Leaving you to simply create employee paychecks.
For additional information regarding the Fair Labor Standards Act, click here
To request a FREE Trial of Crew/Overtime Entry Solution, click here
For a listing of Frequently Asked Questions about Crew/Overtime Entry Solution, click here
Watch the “What is Crew/Overtime Entry Solution & How Does it Work” video by clicking here – requires Flash Player and sound.
2 Responses to QuickBooks Time Card Entry and Overtime Calculations – Beyond the Basics
Leave a Reply
- Using Account Numbers in Your QuickBooks Chart of Accounts
- Straight from the IRS - Social Security Tax Reduced to 4.2%
- Calculating & Displaying Fringe Benefits on a Certified Payroll Report
- QuickBooks Payroll Tip - Tracking Employee Advances or Loans
- QuickBooks 2013 Upgrade Do's, Don'ts & Frequent Questions
- QuickBooks 2012 - Frequently Asked Questions About Upgrading
- QuickBooks Tip - Job Costing Starts With A Simple Item
- QuickBooks Tip-Handling Employee Reimbursements for Expenses
- QuickBooks Creating a More Meaningful Payroll Expenses Section
- QuickBooks Tip - Determing Cost of Goods Sold
- QuickBooks for Contractors Tip – Advanced Progress Invoicing
- Create a QuickBooks Job Cost Report With Hours & Payroll Costs
- QuickBooks Tip - Child Support Garnishments
- QuickBooks for Contractors Tip – Basics of Progress Invoicing
- QuickBooks Tip-Creating a Functional Payroll Liabilities Section
- QuickBooks Tip: Important Facts About Items Left as Billable
- How To Turn On and Use Manual Payroll in QuickBooks
- Welcome to the QuickBooks for contractors blog
- New FHWA-1391 & 1392 Annual EEO Forms For Highway Contractors
- Frequently Asked Questions - California Prevailing Wage