How to set up payroll and your books

[FancyNancy]

My boyfriend and I are opening up a small diner. I am responsible for payroll and accounting. I have some experience in this field but I'm totally new to doing everything myself. How do you handle payroll? I am really tempted by Intuit's Enhanced Payroll Services but I believe it needs to be used in conjunction with Quickbooks. Has anyone used Quickbooks and Intuit Payroll together? Is it a good value?

Does anyone keep their own ledger and how do you maintain it? I am slightly terrified of this.

Any information would be helpful, especially if you are in the restaurant business!

Thank you!

[Freelancier]

I use QB and IOP separately and they work fine for the limited number of people I use. Integrating them could probably be easier than the way I'm doing it, just because I was a customer of PayCycle, which became IOP, so I got used to doing it a certain way. Anyway, it's a good value, just because it automates all the painful parts of payroll and taxes.

[FancyNancy]

Do you use IOP that fills out the tax forms for you or do you do that all yourself? I am not sure how much of a value that is, but it seems significant. Thank you so much for your response!

[Freelancier]

Yes, IOP fills out all forms for me and electronically submits them to the right government agencies (both state and federal). Often with just a single click (once you get all the accounts set up).

[JC]

My boyfriend and I are opening up a small diner. I am responsible for payroll and accounting. I have some experience in this field but I'm totally new to doing everything myself. How do you handle payroll? I am really tempted by Intuit's Enhanced Payroll Services but I believe it needs to be used in conjunction with Quickbooks. Has anyone used Quickbooks and Intuit Payroll together? Is it a good value?

Does anyone keep their own ledger and how do you maintain it? I am slightly terrified of this.


Any information would be helpful, especially if you are in the restaurant business!

Thank you!

This may be your cheapest option. I use it but I only had two employees last year. Hope this helps!

How to Prepare Payroll in Excel: 5 Steps (with Pictures) (http://www.wikihow.com/Prepare-Payroll-in-Excel)

[TejasWebHosting]

Intuit is a decent program when utilized the right way. I would use it if I only had a handful of employees (5 max) and manage PR that way. Otherwise, if your doing it for lets say a corporation or numerous employees learning basic accounting would not hurt (GAAP methods are most common) I hope this helps somewhat.

[tallen]

I do my own payroll using excel spreadsheets that I have created myself to do the calculations, keep track of totals, and print out paystubs, etc...(FWIW, the link to the template in the article that JC linked to is dead). BUT my businesses are seasonal, and I only have a few employees for the few months that we are in operation. I manually transfer the necessary data from the paystubs to my accounting package (Quickbooks) for each paycheck. Since we're seasonal, it's hard for me to swallow paying a payroll service for all the months that we aren't paying any employees. The tricky parts are updating my spreadsheets each year as tax rates change (Intuit's payroll site has a free calculator where you calculate the withholding and other deductions for individual paychecks that I use to double check my own calculations), remembering to file your quarterly and annual tax forms on a timely basis, and making sure that everything reconciles -- the tax forms, your payroll spreadsheets, and your books. To do your W-2's at the end of the year, just use the Social Security Administration's "Business Services Online" site.

[JC]

I do my own payroll using excel spreadsheets that I have created myself to do the calculations, keep track of totals, and print out paystubs, etc...(FWIW, the link to the template in the article that JC linked to is dead). BUT my businesses are seasonal, and I only have a few employees for the few months that we are in operation. I manually transfer the necessary data from the paystubs to my accounting package (Quickbooks) for each paycheck. Since we're seasonal, it's hard for me to swallow paying a payroll service for all the months that we aren't paying any employees. The tricky parts are updating my spreadsheets each year as tax rates change (Intuit's payroll site has a free calculator where you calculate the withholding and other deductions for individual paychecks that I use to double check my own calculations), remembering to file your quarterly and annual tax forms on a timely basis, and making sure that everything reconciles -- the tax forms, your payroll spreadsheets, and your books. To do your W-2's at the end of the year, just use the Social Security Administration's "Business Services Online" site.

Thanks, I didn't realize that. This should work: Payroll calculator with pay stubs - Templates (http://office.microsoft.com/en-us/templates/payroll-calculator-with-pay-stubs-TC104099100.aspx)

It's a payroll calculator with paystubs. Also, I recently tried the SSA's website for the first time and it worked really well...W3's taken care of and W2's printed.

[AJ123]

The easiest accounting software I have ever used is called "Less Accounting". Maybe Look into this service. In my opinion Quickbooks is overly complicated if you have never kept books before and you have a small business. https://lessaccounting.com/quickbooks-alternative/

[TAAccounting]

FancyNancy,

I highly suggest Intuit Online Payroll.

And I have to professionally disagree with JC on the payroll by excel. From my experience, nothing good has ever ever came from using excel to run payroll. It does not hold up to Federal or State audits and you cannot file your forms properly unless you have a lot of time for trial and error. And if you do it wrong; expect two to three hours on the phone waiting for the state to give you an operator to solve the issue.

Intuit Online Payroll is by far the easier and most inexpensive software out there -- next to free software. But keep in mind; free is "free for a reason"

As for AJ's comment, I disagree with that as well. Less Accounting is a pretty nifty software, but you shouldn't be attempting to keep your own books if you are not trained as a bookkeeper or accountant. Your expertise is running a small diner with your boyfriend -- that is why you are opening it with him. Not keeping books, managing numbers, logging receipts, worrying about tax laws, or any of those other task. It is well worth it to get a professional who is willing to work with you in order to make sure you have the proper data the first time around.

I cannot tell you the numbers of time I have came into restaurants and businesses to help them with costs management & cash flow issues just to spend six additional months rebuilding their books because they did it themselves. Mind you, those six months were not free for the clients either.

In my professional opinion, if you are starting a business -- hire an outsourced CFO. They are worth every penny and they will always find ways to make you more money than what it costs to hire them. They will know the financial pitfalls, be able to guide you, make financial recommendations, and definitely keep your financials in order so you can base decisions off of them.

Let me know if you have any questions. Like I said, I've seen this a lot and I am more than happy to help you if you need my expertise.

[Freelancier]

but you shouldn't be attempting to keep your own books if you are not trained as a bookkeeper or accountant.Sorry, but that's just wrong. As a business owner you'd better understand how to keep your books or someone can sink your business by stealing from you. I'm neither an accountant nor a bookkeeper, yet I keep my own books and have for over 20 years and the day-to-day bookkeeping is not hard. I wouldn't recommend trying to figure out tax laws for yourself or even setting up your books -- that is indeed why you pay an accountant -- but the day-to-day registering of revenues and expenses is something you need to stay on top of so that you can ensure your business is being run profitably.

[JC]

FancyNancy,

I highly suggest Intuit Online Payroll.

And I have to professionally disagree with JC on the payroll by excel. From my experience, nothing good has ever ever came from using excel to run payroll. It does not hold up to Federal or State audits and you cannot file your forms properly unless you have a lot of time for trial and error. And if you do it wrong; expect two to three hours on the phone waiting for the state to give you an operator to solve the issue.

Intuit Online Payroll is by far the easier and most inexpensive software out there -- next to free software. But keep in mind; free is "free for a reason"

As for AJ's comment, I disagree with that as well. Less Accounting is a pretty nifty software, but you shouldn't be attempting to keep your own books if you are not trained as a bookkeeper or accountant. Your expertise is running a small diner with your boyfriend -- that is why you are opening it with him. Not keeping books, managing numbers, logging receipts, worrying about tax laws, or any of those other task. It is well worth it to get a professional who is willing to work with you in order to make sure you have the proper data the first time around.

I cannot tell you the numbers of time I have came into restaurants and businesses to help them with costs management & cash flow issues just to spend six additional months rebuilding their books because they did it themselves. Mind you, those six months were not free for the clients either.

In my professional opinion, if you are starting a business -- hire an outsourced CFO. They are worth every penny and they will always find ways to make you more money than what it costs to hire them. They will know the financial pitfalls, be able to guide you, make financial recommendations, and definitely keep your financials in order so you can base decisions off of them.

Let me know if you have any questions. Like I said, I've seen this a lot and I am more than happy to help you if you need my expertise.

I got my idea for using Excel payroll from my friend who uses it, and he owns a Liberty Tax Service franchise. Just out of curiosity, why doesn't it hold up to audits?

[jamesray50]

Hi FancyNancy - Sorry I am late to this thread and I haven't read in detail all the other suggestions so I say something that has already been mentioned I apologize. You mentioned your restaurant is a diner so that makes me think you will have servers who will be tipped employees. If this is the case and you are not familiar with doing payroll for tipped employees I would suggest using a payroll service. I have used QuickBooks desktop software and the Enhanced Payroll for many, many years. I like it very well, the payroll is integrated with the books so you don't have to do any extra entries, there are lots of reports you can run and after it is set up correctly it is easy to use. Notice I said set up correctly. That is the key to using any software. I also use IOP, (Intuit Online Payroll). Although I don't like it as well (mainly because the navigation and reports are different than the Enhanced desktop payroll), it also does a good job with payroll as long as it is set up correctly. If you use IOP you will have to import the payroll transactions into the QuickBooks file but that is easy to do.

Each of these products have different levels of service that you can choose from. If you don't know anything about doing a payroll for restaurants it may be in your best interest to use the service that will do all of it for you. Sometimes paying a little more per month may save you lots of money at year end. If you are doing it yourself and make a mistake and don't know how to fix it, it will cost much more to have someone else fix the mistakes than if you had just paid someone to do it for you to begin with. I would not do the payroll in Excel. Although Excel may work for some small businesses, or even a free paycheck calculator program, in the long run an actual payroll service/provider will cause you the least headaches.

As for a program for keeping your books, QuickBooks will do that for you, but set it up correctly. If you have never used QuickBooks, watch the tutorials, practice transactions in a sample file, make backups of your file before you work so that if something does not seem correct or you know you did it incorrectly you can restore from the backup and do it over. Also, take advantage of the intuit community forum for help with specific questions, use the help file in the program, and don't hesitate to search for someone who is certified in the program to help you.

Keeping your books and doing payroll does not have to be complicated but you do want it done correctly the first time. Although I have been talking about QuickBooks, my advice works for any program you choose to go with.

Good luck!

[tallen]

You shouldn't be attempting to keep your own books if you are not trained as a bookkeeper or accountant.

I don't see why not so long as you are a numerate person, well organized and detail-oriented, keep good records, are cognizant of deadlines, and can read and follow the sometimes convoluted logic in tax publications...


As a business owner you'd better understand how to keep your books.... the day-to-day registering of revenues and expenses is something you need to stay on top of so that you can ensure your business is being run profitably.

I agree. But obviously as the scale of your business grows you may get to the point where you as the business owner or CEO is not the one who is actually doing the day-to-day recording -- at some point you have to hire people you trust to do this for you, and then eventually you will likely be hiring another independent group of people that you (hopefully) trust to double-check the first group’s work for you (e.g. perform an audit)....


Keeping your books and doing payroll does not have to be complicated but you do want it done correctly the first time.

Exactly. See the thing with payroll -- why it is such a big bugaboo -- is that the money that is being withheld and deducted from your employees’ paychecks, you the business owner are holding “in trust,” meaning that you are holding it and paying it in to the government on your employee’s behalf. All “trust” arrangements such as this are subject to extra scrutiny. You don’t want to be short-changing your employees. If you withhold too little tax, or too much tax, your employees may end up having to pay penalties (because of your error). This is not good, not at all. So yes, it has to be done correctly.


From my experience, nothing good has ever ever came from using excel to run payroll. It does not hold up to Federal or State audits and you cannot file your forms properly unless you have a lot of time for trial and error.

That may well be your experience, I can’t challenge that. Certainly if someone is using an Excel template they found somewhere and have no idea what it actually does, how it works, or if it’s calculations are correct, then that is a recipe for trouble.

That said, one could do their own payroll calculations and maintain their payroll records entirely with paper and pencil, and so long as their calculations are correct and their records are complete and organized, it should stand up to an audit. Why wouldn’t this be true if using excel spreadsheets to do the same thing?

But back to the original post:


Does anyone keep their own (payroll) ledger and how do you maintain it? I am slightly terrified of this.

If you are at all terrified, then I would suggest not attempting to do it on your own.