CNA L&P - Payroll Journal Entries when using 3rd party Payroll Processor

PROBLEM:  I'm not using the ConnectNow Payroll System, and I would like to enter the payroll I've manually calculated into the ConnectNow Ledger & Payables System.

SOLUTION:  From ConnectNow Ledger & Payables, click Vendors | click the down arrow at Quick Find and select the Payroll Vendor and click the Find Vendor button at the bottom. 

Click the Account Distribution link.

 Here is what each line will represent:

         Line #1 – The Gross Pay of the employee (Expense Account)

      Line #2 – The Churches portion of Social Security taxes (Expense Account)

         Line #3 – The combination of both the Employee’s and Churches portion of Social Security Taxes (Liability Account, use a negative)

         Line #4 – The Churches portion of Medicare Taxes (Expense Account)

         Line #5 - The combination of both the Employee’s and Churches portion of Medicare Taxes (Liability Account, use a negative)

         Line #6 – The Employee’s Federal Tax withheld from their paycheck (Liability Account, use a negative)

         Line #7 - The Employee’s State Tax withheld from their paycheck (Liability Account, use a negative)

The total at the bottom should represent the NET amount of the employee’s check.

By entering your Employee’s checks in this manner, you will book all of the churches portion of social security and medicare taxes properly, and the amounts you’ll need to pay the IRS for the taxes will be automatically waiting for you in the Liability Accounts.

When you  pay your tax bill, you’ll create a bill to whomever you pay the taxes to (IRS, local bank, etc.) and use the Liability Accounts you used for the Social Security, Medicare, Federal and State Taxes (You probably pay your state taxes differently than the others, but included it in this example just to give you an idea).

 When you pay the IRS, this will automatically lower your liability!  So paying each employee increases the Liability, paying the IRS lowers the liability!

 Once you have your employees set up, you can even choose to Memorize their transactions and the system will automatically create them once a month or semi-monthly (whenever you normally get paid) so you don’t have to re-create the wheel each time!

 

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