expense | QuickBooks for Contractors blog

08May 2013 by Nancy Smyth

Confused About Payroll Deductions and Payroll Liabilities?

Payroll Tips, QuickBooks Setup & Cleanup

Are you confused about payroll deductions and payroll liabilities? If so, don't feel alone! They can confuse a lot of people. Here is a question that was asked and discussed in a bookkeeping group that I belong to. Payroll Deduction Question: Employee has voluntary disability deducted from pay. This is not a liability for the employer to remit...how do I enter this? Expense sounds weird for this situation. Have you run into a similar situation? If so, here are some basic rules and procedures. Answer: Once an employee gives an employer authorization to deduct something from his paycheck (health insurance contribution, union dues, child support, etc.) it becomes the employer's liability (responsibility) to make sure that the money is deducted and sent on it's merry little way. If the employer…

18Apr 2013 by Nancy Smyth

Entering Historical Paychecks – Payroll Taxes and the Accounts They Post To

Payroll Tips, Questions from our readers, QuickBooks Setup & Cleanup

Setting up QuickBooks payroll and entering historical information can be quite confusing. Thankfully there is a Payroll Setup wizard that will help you through most of the really rough parts. I am entering historical payroll from 2012. Our fiscal year began 10/1/12. It is now 4/12/13. How is best way to enter this payroll and balance month by month until I get to the current info. Also, I am confused on what accounts the payroll taxes post to. I'm not sure I have them set up at this point. Especially on the exact accounts I need for payroll taxes and are they debits or credits. and how do I link them to my chart of accounts. Any help would be appreciated. Debbie Hi Debbie If you are entering historical payroll…

07Nov 2012 by Nancy Smyth

Job Costing Payroll When Using a Payroll Service

Job Costing Tips, Payroll Tips, Questions from our readers, QuickBooks Setup & Cleanup

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 Hi Michelle I bet you are having trouble getting payroll information charged to individual jobs, that’s one of the…

01Aug 2012 by Nancy Smyth

Breaking Down Payroll by Job, Phase and Cost Code

Job Costing Tips, Payroll Tips, Reports

Breaking down payroll by job, phase, and cost code is something that I'm often asked about by the construction clients/customers that I work with. Construction payroll is probably one of the more complex payrolls that anyone can encounter, see this question submitted by a reader. I need payroll broken down by Job, then Phase (service item), then cost code. Is there a way to enter time in QuickBooks by three categories? Thanks, Susan Hi Susan Thanks for stopping by and submitting this awesome question! Actually, I'm asked this question a lot and have been working on an entire training series (eBook and several videos) about different ways that contractors can set up QuickBooks to handle even the most complex payrolls like this - unfortunately it won't be finished until…

25Jul 2012 by Nancy Smyth

An IRS Audit..and They Require Copies of Canceled Checks

Be A Better Bookkeeper, IRS Information

An IRS Audit can require you to substantiate expenditures with front and back copies of canceled checks according to an article that I read yesterday on the American Institute of CPAs (AICPA) website, are you going to be prepared if that happens to you? Perhaps you haven't received your canceled checks back from your bank in years, or perhaps your bank has even stopped providing you with printed images of those checks with your bank statement, like mine has - and I must confess I can't even remember when they stopped doing that with our business account - but I do know that it's been several years. Perhaps like me, when your bank stopped returning your canceled checks or stopped providing you with images of them with your bank statement;…

12Jun 2012 by Nancy Smyth

Worker’s Comp Increases 45% in California, Beginning 7/1/2012

Certified Payroll/Prevailing Wage, Construction News, Payroll Tips, Webinars & Training

California Worker's Compensation Insurance premiums will increase by 45% over last year for renewals after July 1, 2012 according to The Worker's Comp Executive. California Insurance Commissioner Dave Jones went against a unified front of labor and employer representatives siding with the insurance industry and the Workers' Compensation Insurance Rating Bureau (WCIRB) in approving a 8.3% increase mid-year rate hike for California employers. Added to the 37% rate increase he approved for January, July and later renewals are facing an average rate increase of 45.3% over last year at the same time. Worker’s Comp and payroll taxes take a huge bite out of a contractors profit when working on Public Works construction projects – especially if the contractor is paying the full fringe benefit rate of the prevailing wage…

05Jun 2012 by Nancy Smyth

Think You Can’t Afford to Pay Your Payroll Taxes-Think Again

IRS Information, Payroll Tips

Failing to remit payroll taxes is a big mistake! Sometimes a business owner will let the payment of payroll taxes slide in favor of paying other vendors OR perhaps will make a partial payment, thinking it will be ok -- not a good idea ----- always remit the full amount of your payroll taxes before paying other bills. Here are a couple of examples why. If you have check writing authority and it can be shown that you were aware your company or client paid other expenses when payroll taxes were due, the IRS can come after you for the taxes, penalties and interest. D and her husband were equal owners and sole corporate officers of a business. After they separated, they continued to run the business. The firm…

09May 2012 by Nancy Smyth

Construction Payroll, Should I Do It In-house or Outsource It?

Be A Better Bookkeeper, Construction News, Payroll Tips

Construction payroll can be complex and many business owners wonder if they should hire a payroll clerk and issue payroll in-house or if they should outsource it. As a contractor a significant portion of your job costs involve payroll and labor burden (taxes, worker's compensation insurance, general liability insurance, company paid fringe benefits etc.) and you need to have these numbers included in your job costing reports so you can analyze your bidding practices and know whether or not you made a profit on the job. If your employee paychecks are not run through your accounting software you loose this vital piece of job costing information. Construction payroll can be complex and the lure of an outside payroll service such as Intuit Full Service Payroll, ADP, Paychex, Ceridian, etc.…

01May 2012 by Nancy Smyth

Entering Bills or Checks in QuickBooks – Items vs. Expenses

Job Costing Tips, Vendors & Accounts Payable

When entering bills, checks, or even credit card purchases in QuickBooks you have the choice to use an Items or Expenses tab - choosing the Items vs. Expenses tab will depend on what the money being spent was for. Your business spends money on a wide variety of things - employee payroll, payroll taxes, office supplies (such as paper and envelopes), utility bills, things that you purchase to resell to others, and goods or services from others are just a few examples. In essence every penny that your business spends is an expense to your business - but how you record the purchase in QuickBooks does make a difference. Because you do you a choice to use an Items or Expense tab when entering transactions in QuickBooks; many people…

11Apr 2012 by Nancy Smyth

ASA Seminar Payroll & Tax Strategies for Public Works Contractors

Certified Payroll/Prevailing Wage, Construction News, Webinars & Training

ASA (American Subcontractors Association) San Diego Chapter Seminar on Payroll and Tax Strategies for Public Works Contractors, May 8, 2012 1:30 - 3:30 p.m. PST, $55.00 Members/$85.00 Non-members - register here. I'm very excited to be working with Steve Kuzmack, President of Fringe Benefit Experts as we present a 2-hour seminar for the ASA San Diego Chapter on Payroll and Tax Strategies for Public Works Contractors. Steve will be live, while I will be logging in remotely. Come join us to learn: Why cash is "KING"! and why Public Works Construction and Prevailing Wage projects require advanced financial planning methods and tools along with an understanding of the ever-changing compliance requirements -- so that you get paid on time! What You Will Learn Learn How: To reduce payroll taxes…

10Apr 2012 by Nancy Smyth

Employee Social Security Numbers on Certified Payroll Reports

Certified Payroll/Prevailing Wage, Questions from our readers, The "Sunburst" Website

Displaying employee social security numbers and addresses on certified payroll reports, which are ultimately public documents, causes privacy and identity theft concerns for many employers and employees - not to mention confusion over reporting requirements. This question was submitted by a blog reader. The instructions for the Federal WH-347 certified payroll report say - The payrolls submitted shall include the following information: Name of each employee A unique individually identifiable number for each employee, or as it was suggested, the last 4 digits of the employee social security number His/her correct classification Hourly rates of pay, including any cash fringe benefits paid Daily and weekly number of hours worked Deductions made and actual wages paid Can we accept a unique individually identifiable number on payroll and is there…

26Mar 2012 by Joyce M. Washington

Construction – Tools & Tax Tips

From Our Guest Bloggers, IRS Information

In the construction industry, for tax purposes, you do treat the purchase of a hammer and a cement mixer differently. Sure you may view them as "tools of the trade" - but the IRS thinks differently! Construction is by nature a tool driven industry. Buying and providing them can get expensive. But how do you know when you can expense a tool and when you should capitalize a tool and depreciate (expense) it over time? Here are a few tips. First off, let’s define expenses from the tax perspective. Any business expense that is considered to be ordinary and necessary is deductible. An “ordinary” expense is considered to be something that is common and accepted in your industry – in this case, the construction industry. To be considered “necessary”,…

21Mar 2012 by Nancy Smyth

Certified Payroll Training Guide

Certified Payroll/Prevailing Wage, Webinars & Training

Certified payroll reporting is complex at best and I've just finished updating our Certified Payroll Training Guide to include the new requirements for the Federal WH-347 form. Making the move from residential or commercial construction projects to government-funded construction projects - which have certified payroll reporting requirements - can be an overwhelming task for contractors, their office staff, and the accounting professionals who support them. Our 76+ page self-paced Certified Payroll Training Guide is a great "good old simple English" reference tool and provides information about answer such questions as: What is Certified Payroll? Who makes the laws governing certified payroll reporting requirements? How do I or my client comply with Labor Standards & Payroll reporting requirements? What information has to be reported on the certified payroll reports? How…

19Mar 2012 by Nancy Smyth

QuickBooks Cost Plus Billing: Automatic Markup of Items

Customers & Accounts Receivable, Questions from our readers

QuickBooks can do Cost Plus OR Time and Materials billing, however, Markups can only be calculated on Expenses. See this question submitted by a reader and learn about ways that you can mark-up Items. In QuickBooks Premier for Contractors is there a way to apply automatic markup on a Item when creating a time and materials invoice? In Premier, from everything I've read, asked experts, and surfed the web; a vendor purchased item that is to be applied to a job should be regarded as a non-inventory item, and applied to a COGS account. In entering the vendor's bill the bill is recorded as an Item which then can be automatically linked to the customer on a time and cost invoice. Since the columns of the invoice can not…

12Mar 2012 by Nancy Smyth

California Prevailing Wage, Certified Payroll and Payroll Frequency

Certified Payroll/Prevailing Wage

California prevailing wage laws are among the most complex, with multiple agencies requiring their own special certified payroll reports and multiple electronic filing requirements - how often you issue payroll will have a big impact. See this question, submitted via our Ask the Expert form. Does California mandate that you pay weekly when working on a prevailing wage/certified job? Thanks, Gail. A. From what I know, California payroll frequencies indicate that paychecks can be run on a weekly, bi-weekly, or semi-monthly basis - but it does depend on the occupation. The Federal guidelines, are clearer, and state it is mandatory for covered contractors and subcontractors performing work on Federally financed or assisted construction contracts to respond to the information collection contained in 29 C.F.R. §§ 3.3, 5.5(a). The Copeland…

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