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Posted by Allan Martin on September 25, 2006, 3:09 pm
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>
>> wrote:
>>
>>
>>>The Allan Martin black challenge is as follows:
>>>
>>>Payroll is processed by an outside service and payroll checks are cut
>>>using
>>>the same operating bank account which is used for other cash
>>>disbursements.
>>>Payroll is grossed up and recorded as a single journal entry once per
>>>month.
>>>
>>>What is the most efficient method of performing a bank reconciliation at
>>>the
>>>end of the month in QuickBooks?
>>>
>>>Who is up to the challenge?
>>>
>> Allan-I've found the best way to do this is one journal entry with each
>> net
>> check entered on separate line to bank acct with the correct ck # in the
>> memo column. The rest of the JE (gross wages, tax liabilities & expense
>> and
>> anything else added to or deducted from p/r checks) is done lump sum to
>> correct accounts. In the reconciliation screen, you can choose to show
>> the
>> memo column which enables you to easily & correctly select the items that
>> cleared.
>>
>> Do you have a better suggestion?
>
> I think there are several ways that payroll can be handled outside of
> using the QB payroll service. I am assuming that one is either using a
> payroll service or the taxes are being manually calculated.
>
> Payroll service:
> I use the Write check function to record the net paychecks with the
> correct check number as assigned by the payroll service.
>
> I then do a JE to record the taxes for both the employer and employee side
> of the equation:
>
> DB: Payroll Expense for the EE Tax withholdings
> DB: Payroll Tax expense for the ER Tax liabilities
> CR: Bank account
>
> I do this for each payroll period so that I can see the actual check
> numbers and taxes transfered to the payroll service to match how they will
> show up in the bank statement.
>
> manual calculation:
> For those clients that are not using a payroll service, the paychecks
> (write checks) would contain the following:
>
> DB: Gross Payroll expense
> CR: Tax payable account(s) for the EE Tax withholdings (as negative
> numbers)
> CR: bank account for net paycheck amount
>
> I create the appropriate payroll Items so that w-2s can be properly
> created at year-end. I use Items for Federal, Soc Sec, Medicare, FUTA,
> State inc tax, State unemployment. Make sure you create items for both the
> ER and EE portions where applicable.
>
> And the JE would only contain the following:
>
> DB: Payroll tax expense for the ER taxes
> CR: Tax Payable account(s) for the ER Taxes
>
> The actual payments (use write checks) to the government agencies would:
> DB: tax payable accounts
> CR: bank account
>
> Again, all of these transactions match how they will show up on the bank
> statement so that doing the bank recs for these transactions are very
> straightforward.
Blab, Blab, Blab, Blab, what about my challenge?
Payroll is processed by an outside service and payroll checks are cut
using the same operating bank account which is used for other cash
disbursements.
Payroll is grossed up and recorded as a single journal entry once per month.
What is the most efficient method of performing a bank reconciliation at the
end of the month in QuickBooks?
>
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