Job Costing Payroll When Using a Payroll Service
Using an outside payroll service, such as Paychecx or ADP, is a popular option for many business owners. While using a payroll service often provides many benefits one of the biggest challenges or drawbacks is for the company that needs job costing. See this question submitted by a reader.
My company uses a 3rd party to do all of our payroll. We receive an itemized report back showing what we spent for the week. I am having trouble trying to get this information charged out to individual jobs. I track all of the hours separately in Excel, with estimated costs. How can I job cost this information? Thank you – Michelle
I bet you are having trouble getting payroll information charged to individual jobs, that’s one of the issues that I personally have with using an outside payroll service. In my opinion, when you use an outside payroll service important job costing data is totally disconnected from the rest of your accounting and job costing information – so you might find my response and suggestions to be a little radical
Unfortunately, because it’s so late in the year – there isn’t much that you can do right this minute to make things easier; however, on the other hand, now is the perfect time to make some changes that will go into effect for January 1, 2013.
- Forget Excel – it’s a handy tool for many things, however, in your case it’s only adding to the disconnectedness of your job costing issue and causing duplicate data entry for you.
- If you aren’t totally in love with your payroll service – check into using QuickBooks Assisted Payroll. It offers the best of both worlds – you get accurate payroll job costing with all the benefits of your current outside payroll service – payroll taxes paid for you, quarterly payroll reports filed for you, W-2’s issued for you, etc. and it “might” even be cheaper than your current payroll service.
- You could bring payroll partially in-house by signing up for QuickBooks Basic Payroll and enlist the aid of your CPA/Tax Preparer to do the quarterly and year-end filings while you make sure that the payroll taxes are deposited on time.
- You could bring payroll totally in-house by signing up for QuickBooks Enhanced Payroll and do everything yourself – tax deposits, quarterly and year end filings.
When you use Assisted, Basic or Enhance Payroll – all of your employees time and payroll data lives inside of your QuickBooks file and when you start by entering your employee’s time directly in the QuickBooks Weekly Timesheet that information transfers directly into their paychecks and gets included in your job costing reports. You can find out more information about the various payroll options offered by Intuit by clicking here – just stay away from Online Payroll Basic, Online Payroll Plus and Full Service Payroll – because you’ll end up with the same problems that you are currently having. If you are interested in Basic, Enhanced or Assisted Payroll, contact me and I can get you a discount.
If you aren’t interested in any of the above suggestions, there are a couple of other things that you can continue to use your current payroll service and:
- Turn on the QuickBooks Manual Payroll Option and “act as if” you are doing payroll yourself – entering time in the timesheet and using the individual paycheck information from the payroll service to “create” the paycheck in QuickBooks.
- Use a combination of Journal Entries and 0-dollar checks to record the itemized payroll information from the service into QuickBooks.
In my opinion, manual payroll and the use of Journal Entries and 0-dollar checks is a LOT of extra work – but they are an option if you want to stay with your existing payroll service. Doug Sleeter (of the Sleeter Group) has written a blog post outlining the use of Zero-Dollar Checks to Record Payroll Costs by Job and Class.
If you would like to discuss this further, please contact me and I’d be happy to arrange some training and/or consulting time to help you make a better decision.
2 Responses to Job Costing Payroll When Using a Payroll Service
Leave a Reply
- Happy 14th Birthday Sunburst Software Solutions, Inc.
- Simple Controls You Can Put Into Place to Discourage Fraud
- Business Susceptibility to Theft and White Collar Crime – Are You a Target?
- Warning Signs & Red Flags of Fraud – Are Your Employees Stealing From You?
- Is Managing QuickBooks Purchase Orders Driving You Insane?
- Free Webinar-Identify and Safeguard Against Business Fraud
- Technology is Changing How We Submit Certified Payroll Reports
- Ask Me Anything – 10 Common Questions about Certified Payroll
- Are Your QuickBooks Payroll & Certified Payroll Processes Efficient?
- QuickBooks Tip: How to find “Notes” after an Upgrade
- QuickBooks Timely Payroll Alerts, Updates & Issues for 2013 Payroll Tax Returns
- QuickBooks Tip: How to Calculate Over/Under Billings
- Happy Holiday’s to you!
- Employee Reimbursements-Accountable vs Non-Accountable Plans
- Sunburst’s Weekly Wrap-Up of Popular Posts 12/2 – 12/8/2013
- Q & A: QuickBooks Employee Payroll Reimbursements & Job Costing
- Sunburst’s Weekly Wrap-Up of Popular Posts 11/24 – 12/1/2013
- Searching For the Right Time Tracking Add-On for QuickBooks?
- QuickBooks at Year-End: Getting Ready for 1099′s
- Sunburst’s Weekly Wrap-Up of Popular Posts 11/16-11/22/2013
- Using Account Numbers in Your QuickBooks Chart of Accounts
- Straight from the IRS - Social Security Tax Reduced to 4.2%
- QuickBooks 2012 - Frequently Asked Questions About Upgrading
- QuickBooks 2013 Upgrade Do's, Don'ts & Frequent Questions
- Calculating & Displaying Fringe Benefits on a Certified Payroll Report
- QuickBooks Payroll Tip - Tracking Employee Advances or Loans
- QuickBooks Tip - Job Costing Starts With A Simple Item
- QuickBooks Tip-Handling Employee Reimbursements for Expenses
- QuickBooks Tip - Determing Cost of Goods Sold
- QuickBooks for Contractors Tip – Advanced Progress Invoicing
- QuickBooks Creating a More Meaningful Payroll Expenses Section
- QuickBooks for Contractors Tip – Basics of Progress Invoicing
- New FHWA-1391 & 1392 Annual EEO Forms For Highway Contractors
- QuickBooks Tip - Child Support Garnishments
- QuickBooks 2012 Announced
- Create a QuickBooks Job Cost Report With Hours & Payroll Costs
- QuickBooks 2012 - Best Practices & Tips for Installing an Upgrade
- Frequently Asked Questions - California Prevailing Wage
- QuickBooks Tip-Creating a Functional Payroll Liabilities Section
- QuickBooks 2011 - New Balance Sheet by Class Report - Part 1