Assisted Payroll for Job Costing


How To Use Assisted Payroll For Job Costing In QuickBooks

 Job costing is a very important part of running a successful business. It is how you are able to tell if your business is actually making money after all the expenses have been paid. For example, a construction company might think a job has been very profitable when the big check is cashed, only to realize they barely broke even once all the expenses (e.g. labor and materials) are paid. Job costing might seem like a complicated process, but it doesn’t have to be. You can use Assisted Payroll for job costing in QuickBooks to make the process easier and your reports more accurate.  This will work even if you outsource your payroll. Here’s how:


How Assisted Payroll Works

 Assisted Payroll is a relatively new option from QuickBooks. Currently, for $69* a month Intuit will create and file your Quarterly and Yearly tax forms. They will also ensure that all your payroll tax payments are made on time. You can continue to take care of your payroll independently and once the payroll is processed, the data will be sent to Intuit for reporting and tax payment. This is a fantastic option for those that need to have their payroll integrated with QuickBooks (especially to correctly calculate job costing) but who don’t want to use the full QuickBooks payroll system.


How To Use Assisted Payroll For Job Costing In QuickBooks

 Many small businesses process payroll by using an outside payroll service, submitting payroll information to their accountant or by cutting their own checks. If this is the case, your payroll expense won’t appear on your Profit & Loss statement, even when assigned to a customer underneath “Jobs.” In order for your payroll expense to show up correctly, you will need to use a workaround. You can do this by:


  • Creating Two New Accounts

Go into your Chart of Accounts and create two new accounts. The first is a bank account titled “Payroll Service Clearing.” The second is an Expense account titled “Payroll Job Costs.”


  • Create Items For Invoices And Estimates

You will need to create a two-sided service item, making sure to check the box for work that is purchased or performed by a contractor. Then go into the “Purchases” category and enter in the full payroll cost (including all wages, benefits and taxes) underneath “Cost.” You will also need to enter all payroll job costs under “Account” within the “Purchases” section.


  • Set Up Employee Data

All of your employees will need to have their information entered into QuickBooks as either a “Vendor” or some other title (other than employee). You will need to do this even if your employee is already listed as an “Employee” in the system.


  • Track Employee Work Hours

Make sure all your employees are keeping track of their hours for each specific job. They can use the Timesheet associated with the project they are currently working on.  The other option is for them to submit their project specific hours to you so you can enter the information in to ensure it’s assigned correctly.


  • Write A Check

After all employee hours are submitted you will need to write a check for $0 in order to move the cost from an Expense to a cost that is trackable. You will enter the words “Payroll Service Clearing” into the section for “Bank” located at the top of the screen. Then enter in the name for the employee’s hours and select the “Add Time/Costs” button and submit all the time amounts. Then switch to the Expenses tab, enter in the Account Payroll Job Costs and finally enter the negative dollar amount in order to zero out all costs from the Items tab.

  • Want more help? Contact us today and we will provide personal assistance to help you with any accounting or QuickBooks question.

*-Intuit may change pricing at any time after this article is posted, please contact us or see Intuit’s website for most up to date pricing. Price applies for specific conditions and services.

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