Record direct deposit checks not sent by QuickBooks in the register
After you run payroll in QuickBooks, all checks are recorded in the check register with the net amounts of the paychecks. When you try to reconcile the checking account, you have to add all the paycheck amounts to verify it is the same amount sent in a lump sum to your bank's clearing house for direct deposit distribution.
You made an Automated Clearing House (ACH) payment outside of QuickBooks Direct Deposit.
You will reconcile the register.
Create a Direct Deposit Offset item.
- Create a new "other current liability" account to zero out the net amount of paychecks (Direct Deposit offset).
- Choose Lists > Payroll Item List.
- Click the Payroll Item button and select New.
- Select Custom Setup and click Next.
- Select Deduction as the Payroll Item Type and click Next.
- Enter name for this payroll item (for example, Direct Deposit Offset).
- Leave the Agency for Employee Paid Liability: Name & Number fields blank.
- Select the other current liability account created in for the Liability account, and click Next.
- Set the Tax Tracking Type to None and click Next.
- Verify that there are no Taxes selected and click Next.
- Select Neither for Calculate based on Quantity and click Next.
- Leave Default Rate blank.
- Click Finish.
Set up the Direct Deposit Offset item in the employee profile.
- Click Employees > Employee Center.
- Select the name of the employee.
- Click the Change Tabs drop down and select Payroll and Compensation Info.
For QuickBooks 2013: Click the Payroll Info tab.
- In the Additions, Deductions, Company Contributions window, enter the direct deposit payroll item in each employee's profile.
- Leave the Rate field blank.
- Click OK to save the changes.
Create the paycheck to record in the register.
- Click Employees > Pay Employees.
- Enter the check date and the pay period to match the check, and click Next.
- Create the check by entering hours, salary, and/or other payroll items.
- Enter the Direct Deposit offset item in the Other Payroll Items section.
Note: It is important that the Direct Deposit offset deduction item always be the last item listed in the Other Payroll Items section.
- Enter an amount for the Direct Deposit offset item equal to the net amount of the paycheck (the amount for the Direct Deposit offset should be a negative number).
- Click Save and Close, then click Create Paychecks.
To create a check for the ACH (bank or institution doing the direct deposit) in QuickBooks, you must use the Create Custom Liability Payments option to pay liabilities:
Set the date range to the payroll date (date on paychecks).
Select the Direct Deposit Offset payroll item used to zero out the net pay on the paychecks.
Click the Create check button.
If your direct deposit institution charges additional fees to do the direct deposit: click the Expenses tab under the liability check.
Select the account used to record the admin expense for direct deposit.
In the Amount field, enter the amount to be paid to the institution for the cost of using direct deposit.
Click the Recalculate button.
Click Save & Close. This creates a liability check to the financial institution that:
- Covers the amount of the net pay for employees.
- Covers the amount charged by the financial institution to do payroll direct deposit.
- Clears the liability account used to zero the paychecks.
When you reconcile the checking account, $0 payroll checks and one check to the financial institution for the correct amount to cover the payroll are displayed.