QuickBooks Weekly Timesheet – Service vs. Payroll Item

The QuickBooks Weekly Timesheet can cause a lot of confusion for users who are implementing employee time tracking for the first time, mainly because the timesheet contains both a Service Item and a Payroll Item.  This article will explain what each column is used for and some common pitfalls that can happen.

QuickBooks payroll tipsJob costing and employee time tracking are important aspects of many businesses – not just construction businesses.  However, when you initially set up timetracking there are many things that can cause confusion.

About Service Items:

The Service Item column represents the type of work that is being performed and allows you to select/enter/choose the name of the service item/cost code from your Item List that you want to use when your charge/bill your customer for this work – OR – when you pay a subcontractor/non-employee for this item.

Even if you do not intend to charge anyone for this work, entering a service item provides a record of the amount of time spent on this specific type of work.  This information will then flow through the the various “Time by” reports as well as your job costing reports..

When a Service Item is brought into an Invoice, it tells QuickBooks which accounts to use to track the income you receive and what Cost of Goods Sold/Expense account to use to track the money your company has spent – so it’s important that your items are set up to capture both Income and Expenses.  This provides you with the ability to analyze which types of work/services are the most profitable and how much company time is spent on producing them.

About Payroll Items:

Payroll Item column allow you to select a Payroll Item {that also exists in the employee record}  which determines how much the employee should be paid for doing the work that you selected in the Service Item column.   This information will then flow through into employee paychecks and perhaps any invoices that you create that are based on billable time and costs.

What if the Payroll Item Column isn’t displayed?

When the Payroll Item column doesn’t appear in the Weekly Timesheet, for one or all employees, it usually means that the employee’s haven’t been setup to utilize timetracking, and you’ll need to check the setup in the employee record to be sure that the “Use time data to create paychecks” option has been checked and that Time tracking has been turned on in the Preferences.

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