This is a continuation of my last post, “Getting Better Control of Your Payroll Liabilities”. This post describes how I reconciled discrepancies between the general ledger and the QuickBooks state liabilities tax report using the “paid through” field in a custom transaction detail report.
For those QuickBooks payroll users who keep a single payroll liability account or who are combining multiple payroll items in a single general ledger account, there is still a means to look at the G/L transactions for a single payroll item. As shown below, create a custom transaction detail report using a filter for the account and the payroll item, and delete the date range filter. It’s important to your reconciliation that you select “Paid Though” and “Balance” as columns to display and sort the report on “Paid Through” so that you group payments with the transactions they are paying for.
The report below demonstrates the value of this method. Tt shows that the selected payroll liability was paid current as of 12/31/2008 and again as of 06/30/2009, even though the payments were made subsequent to those dates. This methodology allows us to isolate the pay periods for which the remaining liability is due.
In reconciling the state unemployment tax, I discovered that a payment made on 05/20/2009 included $634.84 for the liability as of 12/31/2008. However, the state liabilities tax report showed the entire $1,473 payment as accruing toward 2009 liabilities.
The same situation occurred from the same payment toward and “Other State Tax” payment.
Below is the line item in the “state liabilities tax” report that is causing the tax due balances for the current year to be understated.
We now have the information we need to check the accuracy of our state tax reports and decide how to proceed. However we decide to proceed, we need to take whatever action is necessary to get our liability in QuickBooks to agree with reality.
Robert Guild is certified QuickBooks ProAdvisor in Austin, TX who conducts CPE courses for CPAs and individual training and group classes to QuickBooks users. His company at www.QBCoach.biz, maintains a sixteen-station QuickBooks lab, providing hands-on training. You can contact him directly at rguild@QBCoach.biz or follow him on twitter at QBPro