Setting up an Item and Paying non-employees for Time Worked

Posted by on Mar 24, 2011 in Vendors Module | 2 comments

In a previous segment I covered an area to do with timesheets or time data for employees. There will be situations where you have to pay people for their time,  that are not on your payroll.  Fortunuately for you, QuickBooks can transfer the time data for a specified date range to a cheque for non-employees.

How this is accomplished is by QuickBooks prefilling the Items tab of a cheque with information from the time data, which will include the hours worked and rate.

These non-employees might be subcontractors, a partner or owner for time worked. In order to pay these people the person must be on one of the following lists:

  • Vendor (appropriate for subcontractors, especially if you must report payments to them on Form T5018
  • Other Names (appropriate for partners and owners)

I am going to set up a service item for an owner or partner. From the Menu Bar – choose List/Item List/New. In the Type field I will choose Service and in the Item Name/Number type Planning.

I will then tab down to the line with the box that says This service is used in assemblies or is preformed by a subcontractor or partner, check the box. This will open up the Purchase and Sale Information boxes. Once I type Consulting on Inventory Location and Purchases in the Purchase box, it will fill in the same information into the Sales box.

In the Cost field in enter in 50.00, H in the Purch Tax Code,  and from the drop down box, chose Subcontractors from the Expense list.

On the Sales Information side I changed the Sales Price to 75.00, Tax Code to H and the Income Account to Sales.

I can now click on OK to close the New Item window.

From here I am going to record the non-employee time worked. To do that I will choose Employees from the Home page, Enter Time and from the drop down box beside Enter Time, click on Time/Enter Single Activity.

The Time/Enter Single Activity window opens, where I will proceed to enter in the following information into the appropriate fields. Date, Name – James Richardson – notice the moment I chose a Vendor, the Payroll Item field is removed and is replace by the Class field.

In the Customer: Job field I located Jason Cioran from the drop down box, and from the Service Item field – Consulting. The Duration box should have 4:00 in it which represents the time spent on that date.

Clicking on Save & Close will complete this entry.

Now that I have finished with the Time Entry I need to create a cheque for this Owner.

From the Home page in the Banking section, click on Write Cheques.

In the Write Cheques window, make sure that you have the correct bank in the Bank Account field, the correct Date and then tab to the Pay to the Order of field and choose James Richardson from the drop down box. A Pay for Time Worked box will appear with this question – This name has time data in the company file. Do you want this cheque or bill to represent time worked? I will then click on the Yes.

Next will appear the Select Time Period box in which I chose December 1/12 to December 31/12 and then OK.

If you look at the image to your right, you will see that QuickBooks prefilled all of the information from the time data, including hours, rate, item and tax.

Look carefully at the Bill field, which stands for Billable, and you will see that it is not marked so that it is not billed twice – as a time activity and an item.

I will click on Save & Close to exit this window.

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2 Responses to “Setting up an Item and Paying non-employees for Time Worked”

  1. Mellesa Dyer says:

    This name has time data in the company file. Do you want this cheque or bill to represent time worked? –

    This has appeared when i am trying to enter a bill and i am unsure how it has gotten there when the supplier that i am trying to enter a bill against should not have any hours booked to them.

    How do i find this in QB and how do i fix it?

  2. Larry Johnson says:

    Hi Mellesa,
    This is too lengthy to try and explain in a few words and I would have to see how your QuickBooks is set up. If you would like to contact me, I would be more than happy to help you. On the Home page you will find my contact information. My fees are posted in the FAQ page.

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