Enable classes in QuickBooks to talk to Gusto’s departments. This post is a detailed how-to post showing the integration of employee costs by department using Gusto payroll and QuickBooks Online. This breakdown by function has meant intense pain for management as they parse payroll by employee or department into the P&L at month-end or before quarterly calls using incredibly detailed spreadsheets to allocate costs among departments. While some companies have integrated the link between their payroll company and their GL, most who have are still using one GL mapping for all employee costs. This means salaries, payroll taxes and benefits for all employees go to the same line on the P&L. Simple and effective but it doesn’t follow the best practices in the industry.īest practices in the MSP industry are to allocate different employees’ cost according to their function. Client-facing employees’ payroll expenses are included in cost of goods sold. Management, administration and finance are expensed. The movement to cloud computing for small businesses, specifically Xero and QuickBooks Online (QBO), means formerly manual processes, such as recording payroll journal entries, are completely automated. This means huge savings for companies who are unnecessarily paying employees to do totally automatable processes. So many MSPs are spending an absurd amount of time recording payroll entries into the general ledger. Some have a dedicated employee just to run payroll!
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