Tracking employees’ time for payroll and customer invoicing can be time consuming but using some of the features below can make those tasks a little less daunting.
If you are selling goods (inventory), you are creating an invoice or a sales receipt, selecting the product(s) the customer wants along with the quantity, and saving the transaction. QuickBooks reduces the inventory level and records the purchase in the correct account.
Accounting for services sold, such as consulting and labor, can be a bit different. You have to track time and create records for both payroll and customer billing. QuickBooks allows you to track time in individual records and/or traditional timesheets. Here is what you need to know.
Before you can start tracking time, you will need to make sure that tracking time is turned on. Open the Edit menu and select Preferences, then click on Time & Expenses. Under the Company Preferences tab highlighted, click the button in front of Yes under Do you track time? Click the down arrow in the field next to First Day of Work Week to open the list and choose the correct day. If it is appropriate, check the box in front of Mark all time entries as billable.Click OK.
QuickBooks needs some information from you before you can start tracking time.
While you are still in the Preferences window, click on Sales & Customers, then My Preferences. When you create an invoice for a customer that has unbilled time, QuickBooks can open a window listing the billable services (Prompt for time/costs to add) or display a small box asking you whether you want to include those items. Select your preference or Don’t add any, then click OK.
Individual Time Entries
Let’s look first at creating individual time entries. Click the arrow to the right of Enter Time on the home page (or Customers | Enter Time) and select Time/Enter Single Activity. In the window that opens, make sure the Date is set to the date the service was provided (if that is different from the current date that appears). Click the down arrow in the Name field and choose the correct employee, and in the next field, select the Customer:Job.
Warning: If this work was done for a specific job, be sure to click on the actual job, not the main customer entry.
The Time/Enter Single Activity window
Next, select the Service Item, (the service item tied to the work the employee did). Below that, you can either enter the Duration worked manually, or click Start to launch the automatic timer. If the work is Billable, be sure to check that box in the upper right. Add Notes if you would like.
The Payroll Item (pay type) and WC Code (workers’ compensation) fields will only appear if you have QuickBooks set up for payroll. If this is the case, and you do not see those fields, minimize the Time/Enter Single Activity window by clicking in the small horizontal line in the upper right. Click Employees in the toolbar (or Employees | Employee Center) and double-click on the name of the employee. Click on the Payroll Info tab to the left. You will see a line toward the bottom that says Use time data to create paychecks. Check that box and click OK, then reopen the Time/Enter Single Activity window by clicking the double box icon in the lower left of the screen. The two fields should be there.
When you have completed all of the fields required, save the time entry.
Creating time entries is not difficult, but it can be time-consuming if you have many employees that are paid by the hour. In our next newsletter, we will look at QuickBooks’ Timesheet feature. We will also show you how to get information about the time entries you have created and what to do if QuickBooks’ time tracking isn’t robust enough to meet your needs. Stay tuned!