Using QuickBooks Payroll

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Using QuickBooks Payroll
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Learning Objectives

• Activation and Set-up
• Select a Payroll Service
• Enter Payroll Codes
• Enter Year-to-Date Information
• Define Company Rules/Preferences
• Routine Payroll Functions
• Enter Timesheet Data
• Review and Create Paychecks
• Create Payroll Tax Payments
• Print and File Tax Forms
• Payroll Reports

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Activation and Set-up

• First, activating payroll in QuickBooks is easy
  !!
• Secondly, QuickBooks will guide you thru a
  one-time, easy-to-follow interview, that allows
  you to set-up and customize payroll codes for
  your company and enter employee year-to-date
  history.
• The Benefit
• Once all four steps are completed, you will be
  able to generate payroll transactions and
  maintain payroll deadlines effortlessly.

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Step 1 Choose A Payroll Service
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• Step 2 Activate Payroll Within QuickBooks

• From within QuickBooks
• Go to Employees
• Select Payroll then
• Select Order Payroll Service

Definition An employee is someone for which
you pay and withhold payroll taxes. If no taxes
are being withheld from the payment being issued,
then you should refer to QuickBooks vendor
set-up, in order to track or generate 1099
details.
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Once you chosen a desired level of service, you
will be taken to an online order form to purchase
and activate your payroll features
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After payroll activation is complete, you will
notice several additional payroll functions that
have been added to your Employees menu in
QuickBooks
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You will also notice several new payroll icons
added to the Employees section of the Home
navigation Screen (Well come back to these
later, when we are ready to create paychecks)
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Enter Payroll Codes and Year-to-Date Information
Choose Payroll Setup to begin entering your own
payroll codes and employee year-to-date
information
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(1) To establish company policies and
year-to-date information, you will be guided thru
a series of set-up screens. Simply follow the
step-by-step process.
(2) Most screens also offer help links (in
blue) that provide additional information or
details, in order to assist you with your payroll
requirements.
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While some individuals prefer to set-up hourly
codes by workmans comp classification, others
choose to create hourly codes by department name
or functional task. (i.e. Admin, Supervisor,
etc) Be sure to customize payroll items based on
your own reporting preferences or needs. Keep in
mind, that each payroll code can be set to post
to its own unique general ledger account.
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As you make progress, your task list will
continue to advance. You may also click-on any
previous step (if you wish to go backwards).
Youll find that it is easy to Add New items,
Edit or Delete payroll codes
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Once you are satisfied with the set-up of your
payroll wages and deduction codes, you may begin
entering specific employee information such as
hire dates, individual pay rates, personal
deductions, company benefits, sick/vacation
policy information and other relative employee
information.
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As you continue through the set-up screens, there
may be questions that you are not sure how to
answer. (1) You can either click on Finish Later
and come back when you have more information (or)
you can continue without the information and
fill-in the missing information later. (2) You
may want to consider asking your
accountant/advisor to assist you, while you make
progress thru some of these questions.
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Eventually, you will reach a screen that asks you
to Edit year-to-date historical payroll
information about your employees and tax
payments. Notice that your progress will be
displayed to the left of the Edit button.
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For each Employee, you can enter a. Each
paycheck received-to-date (or) b. A
Summary-by-month (or) c. A Summary-by-quarter
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Enter Your year-to-date tax payment information
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Once you are finished with the QuickBooks
Payroll Setup click-on Finish
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Once set-up is complete, you can review or modify
your new payroll codes by selecting Lists then
Payroll Item List. Select the Payroll Item
button to Edit a description, modify the general
ledger account, etc.
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Define Company Rules/Preferences
(This is also a one-time exercise, where you
educate QuickBooks about your preferences for
employee defaults, that will be used for all new
hires
From within QuickBooks, select Edit then
Preferences
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Lets begin by focusing on the Employee
Defaults Settings
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How often do you anticipate preparing
paychecks? Choose from Daily, Weekly,
BiWeekly, SemiMonthly, Monthly, Quarterly,
Annually (or create your own) Keep in
mind These preferences are designed to assist
you with keeping on task with new hire
procedures, although QuickBooks will also allow
you to generate unscheduled payroll (or
paycheck) transactions, when the need arises.
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Set-up your standard (Fed/City/State/Local) Tax
Deductions Be sure to set-up company-paid
state/local taxes that are applicable to the
majority of your new hires. You will also have
the ability to over-ride these settings on a per
employee basis, when setting-up an employee.
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Define your companys Sick/Vacation
Policy Keep in mind Use default settings that
can be applied to all new hires, such as
Maximum number of hours/days earned per year and
other similar sick/vacation rules.
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Do you have a common (or standard) rate
of pay for new hires? Choose from Hourly,
Salary, Commission or Bonus (or create your
own) Keep in mind This preference is designed
to assist you with new hire set-up, so enter
the most common payroll code and standard rate
for new hires (if applicable). QuickBooks will
also allow you to over-ride these defaults, when
the need arises.
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Do you offer Company (or) Employee
Fringe Benefits? Choose from Retirement Plans,
Medical and Insurance Plans, and other Taxable
OR Non-Taxable Adjustments (not gross earnings)
such as Auto. Mileage, Small Tools, Child
Support, etc. Reminder This preference is
designed to assist you with keeping on task
with standard office procedures, although
QuickBooks will also allow you to generate
unscheduled payroll (or paycheck) transactions,
when the need arises.
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The Workers Compensation option comes with
QuickBooks Pro, Premier (or) Enterprise
Editions. (Enhanced or Assisted payroll service
ONLY) This feature allows you to generate
reports for workers compensation insurance audits
and premium calculations, which are very
beneficial to specific industries, such as
construction.
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To SAVE Company Preference Click OK
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Congratulations !!

• You have completed your one-time payroll
• activation and customized set-up. You are
• almost ready to begin creating and printing
  employee paychecks.

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Routine Payroll Functions
In QuickBooks, payroll can be prepared and
managed easily by just following four simple
steps
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Before we begin creating paychecks Lets take
a few minutes to review your payroll options by
clicking-thru the Employee Navigation icons.
Notice that clicking-on Employees will take
you to the employee list
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From the Employee List, you can quickly access or
review existing information Click-on New
Employee to set-up an employee Click-on any
Employee Name to review their individual
transactions Click-on Edit Employee to change
their contact or compensation info. Click-on the
Report links, to access employee earnings or
reports Double-click on any transaction, to edit
or review the transaction
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Use the Edit Employee button to verify Employee
Set-up (1) Toggle the Change Tabs view to
display Payroll and Compensation Info (2)
Verify/Modify Applicable Payroll Codes in the
Item Name and Hourly Rate Fields (3) Be sure to
set the Employee on a Payroll Schedule (4)
Turn-on the Use time data to create paychecks (if
the employees paycheck should be
calculated and determined by timesheet
information) (5) Modify other relative
information (Additions/Deductions/Taxes/etc)
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Repeat these steps for each NEW employee that you
wish to pay (or) to modify existing employees
pay, tax or other changes
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Step 1(a) Entering Timesheet Data (Optional)
Enter the Employees Name Fill-in Relative
Timesheet information Service Item is a service
code for billing purposes Payroll Item is the
pay code for paycheck purposes Billable time is
turned on/off for billing purposes
Click Save New to enter a new employee (or)
Save Close when done
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Step 1(b) Creating Paychecks
Create Paychecks by selecting Start Scheduled
Payroll
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The Pay Period Ends Date is the week for which
you want to pay (typically employers pay a week
behind). The Check Date is the date of the check.
Place a check-mark on the employees you wish to
pay. Notice that not all employees have timesheet
data, but we can still mark them to be paid.
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You can click-on the Employee Name to review (or)
adjust their Gross-to-Net Pay Calculations
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• Edit/Review Payroll Calculations
• Add Hours without Timesheet or CustomerJob data
  (if preferred)

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Earnings
Notice that each paycheck is divided into four
sections
Employee Deductions Summary
Other Payroll Items
Company Expenses
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After Paychecks have been successfully
created, you will be taken to the Print
Paychecks screen
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• Create Payroll Tax Payment
• Select the tax you want to pay
• Click on View/Pay to create

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(1) Review Accuracy of Tax Payment. (2) If you
are using EFT (payment by phone or internet)
rather than printing checks, turn-off the
To Be Printed box and enter the text EFT in the
Check Number field (3) (or) Select E-payment (if
you have signed-up for Intuits E-File Services)
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Step 4 Printing/Filing Tax Forms
When you choose to Process Payroll Forms the
following options will appear
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• If you choose the Federal Forms option, you will
• be given a list of IRS Federal Forms to choose
• from.
• Then, select the appropriate filing period

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QuickBooks will generate and print the forms
for you, including filling-in the blanks,
based on the paychecks and tax payments that you
previously recorded. You may also over-ride the
information, if it is not correct. (although you
should try to determine why it is not correct)
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Notice the multiple Save options
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If you choose the State Form option (from the
Process Payroll Forms screen) you will be given
a list of State Forms to choose from. Then,
select the appropriate filing period and
QuickBooks will generate and print the forms for
you (including filling-in the blanks) Based on
your paychecks and tax payments previously
recorded.
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Notice the multiple Save options
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Payroll Reports

• Are accessible thru three different methods
• Thru the drop-down Menus

The most commonly requested report is the
Payroll Summary Report, which displays earnings
and taxes detailed by employee
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Take a look at the Payroll Summary Report. You
can customize the report, by clicking on the
Modify Report button, or just change the
date range to review one pay-period.
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(2) Transfer Reports into Excel
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(3) The Report Center

• If you hover over the miniature boxes, to see a
  sample of the report (or)
• (2) Click on the report link to generate the
  report (or)
• (3) Read what the report offers

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You can also generate additional time-based
reports, by clicking-on the Jobs, Time Mileage
section of the Report Center
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In Conclusion

• Having attended this course, you should now be
  able to
• Select a Payroll Service
• Enter Customized Payroll Codes
• Enter Year-to-Date Information
• Define Company Rules/Preferences
• Enter Timesheets and Create Paychecks
• Print and File Tax Forms
• Generate Summary and Detailed Payroll Reports

A complete list of federal and tax reminders,
that integrate with QuickBooks, can be purchased
from http//www.accountingdirectors.com/Product/T
axGuardian.html