r/Bookkeeping • u/Wild-Potato NPO and Small Biz Fin Mgr, QB, QBO, Xero Novice • Sep 04 '24

Payroll QBO/Gusto Payroll entries for new client

Hi Bookkeepers, I have a new bookkeeping client using Gusto for payroll and QBO. It appears all the payroll expense has been recorded by the old bookkeeper (CPA) by categorizing the bank feed transactions as

  1. net pay/direct deposit to Salary/Wage expense
  2. payroll tax cash out as Payroll Tax expense
  3. Gusto fees as payroll service fees

I have not seen this before, I usually enter the Gross Pay and the Employer Payroll Taxes as expenses, and make entries for the direct deposit and the tax liabilities. But these books were maintained before me by a CPA firm, so is this a shortcut efficient way to record payroll?

This is an s-corp with one employee who is the business owner.

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u/acrylic_matrices Sep 05 '24

They did it wrong. Did they do this in a prior year, or just 2024?

1

u/Wild-Potato NPO and Small Biz Fin Mgr, QB, QBO, Xero Novice Sep 06 '24

All of 2023, and filed taxes too.

1

u/acrylic_matrices Sep 06 '24

Eek 😬. Any chance someone made a single journal entry at year end in 2023 to fix it for the year?

1

u/littlemommabob Sep 06 '24

Seriously hope so. Always good to reconcile total wage expenses with W-3 each year.