Payroll

QuickBooks provides a fairly good payroll module for the price. The Payroll navigation screen above shows some of the functionality included in this module such as employee time entry, leave of absence, etc. However, to use Payroll, Intuit’s literature is vague and it seems to imply that you are required to sign up for and pay an ongoing monthly fee. In reality, it is possible to use the Payroll module without the monthly service fee, but you will need to update your payroll tax tables manually. When this new online requirement for updating payroll tax tables and related monthly pricing approach came out in 1998, many CPAs cried foul. With the recent release of QuickBooks 2003, Intuit has made it virtually automatic to update your payroll tax tables for no fee – Intuit even reminds you periodically to do so.

QuickBooks payroll does have shortcomings in that it will not produce your SUTA forms, and it will not file 1099 forms electronically. Nonetheless, the reality is that even with these shortcomings and the online requirement, QuickBooks payroll is a bargain.

For those companies who want help with their payroll and filing requirements, Intuit offers a monthly service. QuickBooks Assisted Payroll is a service in which Intuit professionals handle your payroll tax deposits, tax filings, and W2 preparation – with a "No Penalties" guarantee which basically states: “If the data you provide is accurate, on time and your account is sufficiently funded, your payroll tax deposits and filings will be on time and accurate or Intuit will pay any resulting payroll tax penalties.” Basically, your Payroll is outsourced via your choice of on-line, phone, fax or PC input data entry.

Most bookkeepers who are familiar with payroll reporting feel that these services are unnecessary, and in particular they do not like the fact that using these services forces you to have your payroll information completed and submitted a week in advance. However, if you need help, here is a brief review. To get started using payroll, you first need to complete the Payroll set up routine found on your employee menu as shown below:

The payroll setup interview wizard will walk you through setting up taxes and common payroll items that many companies need to do payroll and additional payroll items such as yearly salaries; hourly wages; state withholding; state disability; state unemployment; commissions; and even company contributions. You should skip this procedure if your company has just hired its first employee(s) and has not done payroll before, or has not done payroll this year. When you're setting up payroll in QuickBooks, you need to enter summarized payroll amounts if you're just beginning to use QuickBooks payroll but you've already written paychecks earlier in the calendar year. The summarized amounts ensure correct year-to-date totals on the paychecks you write for the rest of this year. The following screens provide a quick glance at the payroll set up screens:

You will need to choose between three different payroll plans ranging in cost from $80 to $160 per month. The following table displays the differences in these three plans:

If you don't want to use an Intuit Payroll Service, you can use QuickBooks to prepare your payroll manually in which you will need to calculate and enter payroll withholdings for each paycheck in QuickBooks.

Setting Up An Employee

There are numerous screens provided to capture an very large amount of information for each employee. The screens below provide only a few examples of these screens:

Above we see that the personal information dialog boxes provide fields to capture citizenship, military service, disabilities, e-mail address, spouse information, contact names, and even user definable fields.

The payroll and compensation dialog boxes shown below capture information regarding type of pay, pay rates, pay periods, raises, promotions, direct deposit, sick days, vacation accruals, deductions, time and billing options, pension plans, etc.
 

The employment dialog boxes shown below capture information such as starting date, employee type, job titles, leave of absences, termination, active status, etc.

QuickBooks also provides a notepad for collecting free form notes on each employee, including date stamps. There is also a tickler system (shown below) which allows you to schedule future tasks for each employee such as review dates, celebrations, health checkups, etc.

Time & Billing Options

In year’s past, the QuickBooks Timer option was not integrated with QuickBooks, but now it is. Employees have two options for capturing and inputting their time, including the activity dialog box or the time sheet view.

In either case, the system allows the employee to capture time by customer and job. The employee can also add free form notes to each time entry. Unfortunately QuickBooks does not allow you to charge more than 24 hours to a client in a given day – which means that QuickBooks is not suitable for use by lawyers (it’s just a joke – OK?).

When it comes time to write paychecks, QuickBooks works similarly to the process of writing regular checks. One key difference is that you can view the employee’s paycheck details with one click of a button as shown below:

This screen is handy for verifying the deductions and payment amounts before printing.

Payroll Liabilities

As employee paychecks are processed, QuickBooks does a decent job of tracking all payroll liabilities. These liabilities can be viewed in the following report:

From this screen simply place a checkmark next to the liability you wish to pay and click create – QuickBooks will create the check automatically, including amounts and accounts as shown below:

QuickBooks will also produce the various monthly, quarterly and annual payroll tax returns and forms for you. To do this a rather lengthy payroll processing wizard is provided which includes 16 steps and allows you many opportunities to adjust the amounts to be included on these forms.

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