Last week we looked at setting up QuickBooks to track Workers’ Compensation costs as we did payroll. The result was a nice report showing the hours and amounts employees had worked. Using the data on this report could help make workers’ compensation reports much easier to prepare.
Let’s look at some more benefits that QuickBooks offers when we track workers’ compensation costs.
If you track projects or jobs at all, additional setup will get the workers’ compensation costs into the expenses associated with the project involved.
The first step in this process is to be sure the preference is selected. The “Job Costing, Class and item tracking for paycheck expenses” option must be checked. Workers’ compensation would be considered a paycheck expense.
Note the selected area in the Earnings section of the paycheck shown above. We have the ability to set the workers’ compensation code. We fill in the Customer:Job selection. And we specify what work the employee was doing, by selecting a service item.
In this case, Michael Wilhite did framing (service item) for Chris Baker’s Family Room (Customer:Job) and the workers comp code for that is 5645.
Let’s see what that does for us on a report tracking the costs of this project.
Above is a portion of the Job Profitability Detail report for this project. There is a cost for the framing portion of the job. This cost is the paycheck we created for Michael Wilhite.
Let’s examine the details of that framing cost.
The detail report of the framing expenses does not specifically label all the individual lines of expense. But they all come from the same paycheck, they are just different components of that transaction.
The $123.23 expense line is the workers’ compensation expense associated with this Chris Baker project so far. It comes from the one paycheck we created earlier.
While the required information to create this kind of expense tracking can be done from the paycheck, as we did, it is more often entered into the weekly time sheet.
You can see from the screenshot that all the same information that appeared in the paycheck appears here in the weekly timesheet. The timesheet is especially helpful if a number of different projects were worked on during the week.
Once saved, the time from the weekly timesheet directly imports into paycheck creation, so it doesn’t need to be entered twice.