How to Use ADP With Quickbooks

by David Roberts

Intuit, the company that makes QuickBooks accounting software, has an excellent payroll service. Still, for whatever reason, some companies choose to use a third-party payroll processor like ADP for their payroll services. Using a third-party payroll service requires that you enter the payroll information twice. Once for entering and sending it to ADP and again for entering it into QuickBooks. Many of these providers claim to have a feature to directly download the payroll information into a QuickBooks file. Downloading anything directly into QuickBooks can have some serious consequences, however.

Open Quickbooks. Click on the "Help" key located in the top menu bar and then on "Search."

Type the phrase, "Enter payroll manually" into the blank search box and click "OK." The fifth or sixth option down will be "Calculate Payroll Taxes Manually (without a subscription to QuickBooks payroll)." Click that and scroll down to the sentence that reads, "Set your company file to use the manual payroll calculations setting." Then click on that sentence.

Obtain the ADP payroll report that you should get each payroll period. Make sure that the report is complete as some reports only give totals of Federal Taxes paid without giving the detail of how much was withheld for which employees. You will need this information, so if ADP doesn't provide it normally, you will have to make a special request.

Enter the summary of each employee's gross and net pay into QuickBooks. When the option of entering payroll manually is completed, the "Pay Employees" icon will appear on the "Home" menu. Click on that and check each employee getting paid on the screen that pops up next. Click on the "Open Paycheck Detail" button. Each employee getting paid will have his own window to enter the ADP payroll summary.

Copy the information off of the ADP report into these windows. Copy the earnings, hourly rates and hours in the top column. Enter the company contributions to Social Security, Medicare and Federal Unemployment into the "Company Summary" column in the lower-left of the screen. Enter the employee contributions to Federal Withholding, Social Security and Medicare into the "Employee Summary" columns.

Add other payroll items from ADP into QuickBooks. If any Health Insurance, Life Insurance or wage garnishments are being taken, these will have to be entered into the "Other Payroll Items" columns in the center of the screen. Use the payroll item wizard to get these accounts entered correctly into QuickBooks.

Assign wages or salaries paid to a customer or job. If your business is one that uses job costing, use the "Customer/Job" column in the Earnings portion of the paycheck screen. It is located on the top-right section under the "Direct Deposit" box.

Tip

  • With the amount of time you will be spending re-entering data into QuickBooks that you have already once entered into the ADP software, you may want to consider using the Intuit payroll services, if for nothing else to avoid transcriptional errors from entering the same data twice.

Warning

  • Some third-party payroll systems have a feature that can be used to directly download all the payroll information into QuickBooks with the click of a few buttons. This can be tricky however, because often the accounts used by the ADP software won't match up with the ones in QuickBooks as ADP will use lumpsum payments for payroll taxes that don't translate well into tracking the taxes paid for individual employees.

About the Author

David Roberts has been writing since 1985. He has published for various websites including online business news publications. He has over 11 years experience in tax preparation and small business consultation. He is also a Certified Fraud Examiner. He received a Master of Business Administration from Florida Metropolitan University in 2005.

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