Quickbooks with ADP payroll

Enter the J/E like this:

1. Set the file preferences to No Payroll.
2. Go to your chart of accounts and change the name on the default QuickBooks accounts: Payroll Liabilities-old and Payroll Expenses-old & make them inactive.
3. Create your own payroll accounts, Payroll Liabilities and Payroll Expenses
4. Set up a journal entry (and memorize it to use each paycheck date).
5. Debit_Gross Wages
6. Credit_Health (if applicable - employee contributes)
7. Credit Advances (if applicable - employee repays advance)
8. Credit Garnishments (if applicable - employee has wages garnished)
9. Debit Payroll tax expense (total Employer Paid to one account)
10. Credit Checking for Payroll tax liabilities (use your new Payroll tax liability account)
11. Debit Payroll service fee (for Paychex, ADP or other payroll service. invoice)
12. Credit Checking (Paychex ADP, etc. invoice withdrawal)
13. Credit Checking (direct deposit total)
14. Credit Checking Net payroll by entering the net paychecks for each of your employees.

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Or just make the payment to ADP hit the Payroll Services Expenses account.

Reka

Thank you Reka and Lynda.

I followed Lynda's advice and I created NEW Payroll Liability (under other liabilities) and Payroll Expenses accounts. I entered Payroll Liability journal entry, when I paid the ADP/(employee wages ) from my bank account, the wages on P&L cancelled each other--journal entry was -ve and ADP Check was +v.
 
I am kind of lost here.

I have created:
      - Payroll Expenses
            - ADP Payroll Fees
            - Employer Payroll Taxes
            - Wages ( I don't need to break it up, because
                                 ADP will take care of net pay and taxes)

How can I enter Payroll Liability, and pay to ADP from my BANK account under listed above PAYROLL EXPENSES accounts. In my P&L I see wages paid in my expense section.

Thank you for your kind help.

Regards.

Since you are using an outside service, you just need to make the journal entry described above for the payroll entry and also enter the net checks for your employees as well as a check to record the service charge for ADP.

To make it easier for you, here is an idea:

If ADP pays all the payroll taxes, medical insurances, retirement deductions/matches, etc and you pay one check per pay period to ADP:

Create the check with "split" lines (the total amount will be distributed to more than one account). Use the following lines:

Wages (total gross wages from the ADP bill - It can be Payroll Expenses, too)

Payroll Taxes (this would be only the company portion of the payroll taxes - you can separate them to FICA (= social security + Medicare), Federal Unemployment Taxes, and State Unemployment Taxes)

Workers Compensation (if you have any)

Employee Medical Benefits (the company portions of the health, dental, etc insurances)

Retirement Expenses (only the company portions of SIMPLE IRA, 401(k), or whatever retirement plan you have)

Employee Service Fees (ADP's fees)

The total amount should give the total due to ADP. All of these can be separate accounts (Wages, Payroll Taxes, Fed. Unempl. Taxes, State Unempl. Taxes, Workers Comp, Employee Medical Benefits, Retirement Expenses, Employee Service Fees). You can break it up as much as it makes sense for you. Or you can use one account for everything: Payroll Services Expenses. If you are not paying anything separately, but ADP takes care of all the payments, this is the way to go.

If you yourself (I mean your company) is paying for most of the payroll liabilities and ADP only calculates the payroll checks, it is a whole different story. In that case you might rather use the actual payroll checks mode, though you can use the "After the fact" feature because all the amounts are going to be given to you by ADP. If this is the case, please "Comment" it, then I will try to give you a solution for this scenario, too.

Reka

Thank you again.

ADP will take care of payments, and the company will take care of ADP. Reka, you suggest that since ADP is making all the payment -- wages, taxes, etc., all I have to do is break the amount in various account and enter as PAYROLL EXPENSE. When I do this drill, I get P&L showing all the details. However, if I enter PAYROLL LIABILITY JOURNAL and breakup ADP invoice in to various accounts, then things get messy. I like to break up ADP invoice so that the company folks know how the funds were distributed in to various accounts.

Now, the question is, should I make entries in PAYROLL LIABILITY JOURNAL at all. This is first time I am messing up with PAYROLL as you can tell. I will give this forum a hard time, especially Lynda and Reka, but I will learn.

Once again, thank you for your kind help and BEST REGARDS.

I guess, I figured it out how to enter into QB using ADP payroll services.

I enter my payroll liabilities -- wages and employer portion of payroll into PAYROLL LIABILITIES journal. I can break up each employees wage and employer taxes separately. When I pay ADP, I can enter a check with PAYROLL LIABILITY account. This way, I cleared the liability and I have liability distributed into respective account. I can pay ADP for their services as a separate entry in PAYROLL EXPENSES -- like bill pay (not as a PAYROLL LIABILITY though).

Does this sound a reasonable approach.

Thansk.