Can Estimated Workers Comp in PR be set to Non-Booking acct to prevent Prepaid and Estimated from showing up as expense on P&L?

I am using QB desktop Enhanced Payroll and have one employee. This is a new business so I had to prepay the workers comp insurance and entered it as a Custom Payment in Payroll and used Workers Comp Payroll Expense as my GL Account. However, I also want to track the estimated workers comp by paycheck, so I have turned the Tracking function on in the Company Preferences and have included the WC Code in the Earnings Section of the employee’s paycheck. I use cost accounting so I need the prepayment to show as an expense during the period it was paid, but on my P&L, the estimated WC from the employee paychecks is also included in the WC Expense which is causing the expense amount on the P&L to be too much. Is there a way to make the Estimated WC from the paycheck hit an account that is a non-booking account so that I am able to see both?

Answer

"so I had to prepay the workers comp insurance and entered it as a Custom Payment in Payroll"

You would post that to a generic Other Current Asset account for Prepayment. Then you will show how they Apply your prepayment as part of using Payroll and the Pay Liabilities function.


You cannot use QB payroll like this: "and used Workers Comp Payroll Expense as my GL Account."

Because you just Bypassed the Payroll item and all the Payroll functions. And Prepayments are not Expense, if that is a Prepayment.


"However, I also want to track the estimated workers comp by paycheck, so I have turned the Tracking function on in the Company Preferences and have included the WC Code in the Earnings Section of the employee’s paycheck."

When you use the Pay Liabilities function, you see the Gross Check to issue, but click on the Expenses tab to reduce it to Net, by using Negative for the Other Current Asset = applying your prepayment to the amount owed. That = net payable now.


"I use cost accounting so I need the prepayment to show as an expense during the period it was paid"

Taxes are not expense when Paid, as part of payroll. They are Computed in payroll and Expense for that paycheck Date; the Payment clears the Liability.


And if you want Job Cost tracking, that also is from cutting Paychecks = the purchase. And Job Tracking details is from timesheet data passed to the paycheck, seen in paycheck Details. In Preferences, you set Payroll to Job Track per Earnings item and to Job Track Expenses (employer taxes, WC).


"but on my P&L, the estimated WC from the employee paychecks is also included in the WC Expense which is causing the expense amount on the P&L to be too much."

Because you entered it Twice; once manually and Payroll is also doing it for you.


"Is there a way to make the Estimated WC from the paycheck hit an account that is a non-booking account"

Change yours to Other Current Asset. Show it is applied to the Actual Amounts you are supposed to pay, but it reduces the amount you Pay. Not reducing the amount you Owe.

If they made you prepay and they Hold it, that also is simply Other Current Asset, a type of Security Deposit that they have Your Funds for now.

Please see my attachments.
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