QuickBooks Online Payroll 'Cost Allocation'

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One of the significant issues with QuickBooks Desktop users who track job costs was that you could not achieve the level of detail they required in QuickBooks Online using QuickBooks Online Payroll and QuickBooks Time. 

Even though QuickBooks Online could track customer-related revenues and costs by project and class, journal entries had to be created in QBO to post an employee's payroll costs into multiple classes and projects if you wanted those costs reflected in the P&L and project reports.

At the recent QuickBooks Connect, Intuit announced that QuickBooks Payroll can now split employee payroll costs into multiple classes, customers and projects, ensuring accurate tracking without additional journal entries.

This is potentially a game changer because the issues of time and cost tracking for customer, project (job) and class have been resolved.

Many QB Desktop users may finally be able to migrate to QuickBooks Online without loosing data and granular reporting.  Murph

While QuickBooks Time has been able to produce reports that tracked time against customers and projects, as well as QuickBooks' class,' the ability to split costs from time in payroll simply didn't work, until now.

The new QuickBooks Payroll cost allocation system will leverage QuickBooks time tracking more efficiently to give you and your clients confidence in making intelligent decisions, deeper insight into the P&L by different areas, and the ability to save time by eliminating the need for extra journal entries.

Data tracked in QuickBooks Time will feed directly into QBO Payroll. The flexible system will allow changes to assignments and wage splitting across different projects or classes during the payroll process.

Inside QuickBooks Payroll, you can select an option to categorize payroll time transactions. QuickBooks Time entries will be allocated; however, it's simple if you want or need to make adjustments.

You can split any time entry to divide it between class and customer/projects.

Then, select from the available classes and customers/projects using the drop-down lists.

Soon, QuickBooks will not only split the employee's time but also all the related payroll tax costs on a percentage of the total payroll for the employee—that way, all payroll costs are allocated to the customer, class, and project.

Now QuickBooks Payroll (coming soon in an update) can split an employee's hourly and non-hourly payroll costs into multiple classes and customer projects. You will no longer need to post journal entries to create granular classifications and project cost tracking.

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