Payroll for Work Hours & Drive Time Invoicing Problem

Entering payroll for normal employee work hours and drive time and passing only the work hours through to client invoices is not only important but confusing.  The following question was submitted by a reader.

Hello – I own a residential and commercial cleaning company.  I have several employees.  I pay from the start of the first job till the end of the last job of the day (not including lunch break).  I have my employees fill out a time tracker sheet each day that shows the time started at the first job till the end, drive time in between jobs, so on and so forth.  I enter this into QuickBooks but I can’t figure out where to enter in drive time to pay the girls their hourly wage on payroll but to not invoice anyone for drive time.  Any ideas?  Thanks, Keri

Hi Keri

Thanks for dropping by and submitting a question.

For the most part you seem to have a pretty good handle on things; as well as a good procedure in place for your employees to track their time so that you can invoice your clients/customers accordingly.

While your procedures are good for time tracking, let’s talk about your QuickBooks setup.

I’m betting that you only have a single QuickBooks payroll wage item (perhaps Hourly Wage) that you use when you enter your employees time into the QuickBooks weekly timesheet so you can process paychecks and then use those hours to pass through to your customer invoices.  If you go into your Payroll Item List (Lists menu -> Payroll Item List), what payroll items do you have under the Hourly Wage section?  Is is just a single item – perhaps the default QuickBooks Hourly Wage payroll item?

If so create a new wage item called Drive Time, make sure that you assign it to the same account on your Chart of Accounts, (you may have edit the first one to see how it’s set up – OR – you can even create a new account to separate work hours from drive time).

Once you’ve created that new item, edit each employee’s record, go to the Payroll & Compensation tab and add the Drive Time item to the Earnings section and give it the appropriate rate of pay for that employee.

When you transfer their hours from their time tracker sheet into the QuickBooks Weekly Timesheet select the appropriate Customer:job, Service Item (if you use them) and use the “normal” Hourly rate payroll item for the time they spent on the job – setting it as billable.

On another line, select the Drive Time payroll item and enter the appropriate number of hours they spent driving – set this entry as “Non-Billable” by unchecking that little checkbox in the billable column.

All of the hours will transfer over to their paycheck when you pay them, but only the billable hours will transfer to your invoices when you are ready to bill your customers for the work that your company did.  It’s a little more work, but I think that you’ll be happy with the results.