Companies keep an eye on all the records while using QuickBooks for handling business transactions. Sometimes, QB users might come across 10 Most Common QuickBooks Payroll and Bookkeeping Mistakes while handling Payroll and Bookkeeping.
So, the question arises that how do these mistakes occur, and how do troubleshoot them effectively?
10 Most Common QuickBooks Payroll and Bookkeeping Mistakes
Here are the most common mistakes committed by companies while filling Payrolls and Bookkeeping. These are as follows:
- Reimbursements exclusion: Companies tend to include incorrect reimbursements while Payroll and Bookkeeping which is an error of judgment.
- Classification of employees: Some companies mention their employees as independent contractors. But they are not the same aspect as there is a big difference between contractors and employees.
- Form 1099: Most of the companies randomly issue Form 1099 only to independent contractors and vendors. There is a prescribed limit in business for issuing this form. Now, releasing the form randomly to anyone can be a massive mistake due to the imposition of substantial penalties.
- Backup Withholding: Some of the Companies might neglect backup withholding. Acquires Form W-9 and pays a vendor, then they may be subject for paying a few amount for hold.
- Withheld Taxes: These taxes are the deposit from employees pay structure, and these employees should ensure to pay the Withheld taxes within the given time limit. Failing in that might result in interest charges, penalties, and late deposit fees.
- Not Consulting experts and ProAdvisors: Some small business owners try to deal with payroll and bookkeeping matters on their own. It may results in errors if not handled properly.
- Balance Sheet: Balance Sheet points out the insights of your business. These sheets reflect the assets and liabilities of accounts. Some of them might not review them wisely and commit mistakes.
- Not Backing Company Files: Some of them might not backup QuickBooks while using QuickBooks company files. So, the chances are that while Payrolling and Bookkeeping, users perform this mistake.
- Loans in QuickBooks: While taking out Loans in QuickBooks, users might neglect the parameters like maintaining and recording the interest, breakdown, and principal which may turn out to be a problem if not deal properly.
- Prizes, Gift Cards, and Rewards: While Payrolling, the companies might not consider rewards, gift cards in the employee’s total income which is wrong.
Effects due to incorrect Payrolling and Bookkeeping
Due to the above causes, companies might face some severe consequences such as miscalculations, judgmental mistakes, and heavy penalties. Most Common QuickBooks Payroll and Bookkeeping Mistakes will take more companies’ time and chances. Are they might lose their assets if incorrectly treated? In case you would like professionals to handle your issues, you can always contact our QuickBooks Payroll Support Phone Number, toll-free!
Dealing with these mistakes- Steps and measures
Here are step-by-step approaches that users need to follow for smooth and effective functioning. These are as follows:
- Reimbursement inclusion: Company should include reimbursement only when it is not done for the benefit of their aspect while other payments should be mention as taxable wages.
- Stratification of employees: It is one of the most important aspects while dealing with Payrolling. Stratifying will give them the correct idea of whether the workers are independent contractors or employees.
- Independent contractors and vendors in Form 1099: This form should be given only to those individuals who can provide $600 and above billing of the services.
- Don’t Neglect Backup Withholding: Companies should consider backup withholding seriously otherwise it may become a serious issue.
- Deposit Withheld Taxes: Companies should deposit withheld taxes to save themselves from extra charges and late deposit fees.
- Consult ProAdvisors: Companies should consult experts and ProAdvisors while dealing with Payrolling and Bookkeeping.
- Review Balance Sheets: Companies should ensure to review Balance Sheets and should rectify the mistakes if present.
- DropBox: Using DropBox not only helps backing up the Company Files, but it will also ensure to be preparing of any Company Crash.
- Tracking Loans: Companies should take precautions after taking loans from QuickBooks like monitoring the monthly loan balance, principal and interest breakdown.
- Including Prizes, Gift Cards, and other benefits: Make sure to include these benefits in employee total income only if it is valid.
The above Explanation will not only solve your problem of payrolling but will also ensure to work any issues. If there are some other issues, then you must consult the QuickBooks Helpline number.