Past Payroll Manual Entry

GPearsonGPearson Member Posts: 3

I just started business July 2019, The company which is doing the bookkeeping and payroll is using QB to this date. I learned about this back in March. I have all of the numbers from QB on Payroll and want to manually enter this data so that my accounts are correct to file my 2019 tax return.

My question is since I am going through the setup of payroll today, And I enter Aug 2019 information, Between the Gross Pay and the Net Pay (Which shows in my bank statement) None of the other payroll accounts will deduct from the Gross Pay in Transaction Mode. I even tried to classify some amount as Payroll Liabilities.

What have I done wrong or How can I get to the right numbers on the Profit and Loss Report.

Comments

  • JordanDJordanD Administrator, Moderator Posts: 501 admin

    @GPearson Hmm this is definitely a tricky one, mainly because there are multiple ways to account for payroll bookkeeping and as I am not an accountant, I can only speak to the way that Wave tracks this.

    For Wave Payroll users, we track bookkeeping by creating a journal entry that typically tracks the gross pay and the deductions as totals for each payroll. The journal entry then balances itself by the same amount as liabilities (specifically the payroll liabilities account with separate line items for amounts you would pay to employees, federal liabilities owing to the government, and state liabilities (if applicable)). This would show that the business incurred an expense for the gross pay and deductions, and has a liability to pay this amount to the employees. Once you actually pay the amount to the employees (i.e. the funds leave the account), then you would see a separate transaction show up in your bank account transactions, which you would categorize to the payroll liabilities account to show that you have paid the employees and that you no longer owe them their pay because it has been paid. The same would apply when you make a payment for your payroll tax liabilities. This Help Centre Article should walk you through the way that Wave creates the entry and also has a picture of the journal entry: https://support.waveapps.com/hc/en-us/articles/115005714406-Payroll-by-Wave-All-about-the-bookkeeping

    In saying this, I would recommend reaching out to an accounting professional if you are looking to complete the bookkeeping in a different manner. While we can explain the operational actions to complete the bookkeeping in Wave (i.e. how to create a journal entry), we can't necessarily speak to the nuances of the accounting practices (i.e. what goes in the journal entry) as we are not licensed CPAs here on the Support Team.

    I would however be curious if any of the Accountants in our Wave Community would like to jump in to help out @GPearson here!

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