Why do you combine "Payroll" with "Subcontracted Labor"?

<This article refers to using your Transaction Detail sheet which is linked in your Dashboard.>

The reason we combine “Payroll” with “Subcontracted Labor” is because without requesting and booking every payroll report (which would be very time consuming and therefore an additional cost to you as the client), we have no way of knowing if when someone receives a check it is a payroll check, a reimbursement check, a subcontractor, etc. So we code everything to this combined account called “Payroll & Subcontracted Labor”, including the payroll taxes and processing fees. But you can of course review and make any changes you would like to separate these numbers out.

By default we code checks written to individuals as if they were for a service provided, in which case I will send that person a 1099 at the end of the year (please make sure to have service providers sign a w-9 form). The purpose of this review is to identify any transactions that are not for a service provided. Examples would be:

  • Goods purchased.
  • Expense reimbursements.

If a transaction listed here is for either goods purchased or a reimbursement, it’s important you tell us what was purchased, or in the case of an expense reimbursement, tell us the breakdown of expenses reimbursed by creating a Split ( covered in this article).

If when writing a check to someone, you included the words “Expense Reimbursement” in the memo of the check, we still code the transaction to Payroll & Subcontracted Labor. The reason for this is because we don’t know what expenses were reimbursed. So we want to give you the chance to let us know the breakdown using a Split. Once you do, we will recode the transaction to the appropriate place.

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