Many bookkeepers and businesses are not aware that it is possible to import payroll data into QuickBooks. As I stated in a previous post we always recommend that our clients outsource payroll for a number of reasons. Entering payroll data into QuickBooks accurately can be tricky and time consuming. Finding an outsourced payroll company that not only handles all aspects of payroll, but also can provide you with a file that will import the payroll data into QuickBooks is essential. Here are a few tips for accurately importing payroll data into QuickBooks.
Find a reliable payroll company that has proven experience with importing payroll data into QuickBooks
We have worked with several companies that promise they can provide us with a file that can import payroll data into QuickBooks. However, not many of them can do it effectively and it becomes more work than it is worth. I will highly recommend Qqest as a payroll company that has provided us with a great working import file and excellent customer service. You can contact our Qqest sales rep, Brad Rich by emailing him.
Communicate with the payroll company to have the import file match the checking account activity
To make it easy on you and your payroll company you want to find out how the payroll data will hit the checking account and have the payroll company mimic that flow. For example: will actual payroll checks clear the bank or does the payroll company take out one lump sum to cover the entire payroll. I have seen every type of situation. The most common set up I have seen is this: actual paychecks clear individually, there is a direct withdrawal for payroll taxes, there is a direct withdrawal for direct deposits and there is a direct withdrawal for the payroll processing fee. Just talk it out with your payroll service to figure out how to properly build the import file.
Backup prior to importing data
I'm pretty certain of one thing; the first payroll import will not be perfect. The lesson to learn here is to backup your QuickBooks file prior to importing your payroll data (or any data for that matter). Then you can figure out what changes you need your payroll company to make and rework the import file. You can then restore your QuickBooks file to the backup prior to import and try again. Perfecting your import file with your payroll company is going to take patience, time and communication. However, once you have a good import file it will be more than worth the effort.
A few other tips and tricks
Here are a few tips I have learned that I feel are worthy of passing on. Have your payroll company give check numbers to the direct deposit checks that follow this format: DD followed by year, month date. For example if you had a payroll on 8/31/11 label those direct deposit checks as DD110831. This makes it easy to identify and match up direct deposit checks for multiple payrolls. Follow the same procedure for your payroll tax check but replace the DD with TAX. When your payroll company builds an import file for your payroll data all fields must match up to QuickBooks exactly for punctuation, capitalization etc. Most mistakes occur when the chart of accounts do not match up. The solution is to export your chart of accounts to excel and email it to your payroll company so they have all data as it reads in QuickBooks. You can export your chart of accounts by going to Reports/List/Account Listing.