QuickBooks Online is an online platform geared towards small to medium-sized businesses who are looking for real-time views into the day to day expenses of their business. Features include expense tracking, data entry, mobile compatibility, and accountant access for a fully rounded software experience.
Our two-way integration with QuickBooks Online builds and syncs a detailed journal entry into your QuickBooks Online Account. We can pull your chart of accounts directly from QuickBooks Online and use your customized accounts to create a journal entry. There are also options for additional levels of granularity within the entry based on earnings types, Gusto departments, and QuickBooks Online classes.
Follow along with the video above or the steps below to connect QuickBooks Online to Gusto.
Total wages, taxes, benefit deductions/contributions reimbursements and contractor payments will now sync to your QuickBooks Online account each time you run payroll.
When setting up your mappings you will be prompted to add:
In order to properly sync over the payroll details through our integration, each of these payroll items will need to be linked to an account that is pulled directly from the Chart of Accounts in QuickBooks Online.
Once all payroll items are matched with the corresponding accounts, the building blocks are in place for the Journal Entry that Gusto will sync over into your accounting software.
The more accounts you choose when setting up your integration, the more detail there will be in the line entries on your Journal Entry. More detail in the entry results in more detailed reports in your accounting software (profit and loss report, expense reports, outstanding liability reports etc.).
If you don’t see an account you’d like to use, hop into your QuickBooks Online chart of accounts and create an account. Refresh your page and it will be available in Gusto.
To get started:
This means you can have the earnings of one job go to one account and the earnings of a second job go to a different account. This will expand the entry we send over into the accounting software.
If you use QuickBooks Classes, you can also map your job codes to Classes in step 9 below. The same expense account can be used for each team and have an assigned QuickBooks Class—this keeps the reports in QuickBooks much cleaner and easier to understand.
Assign employees to jobs
Before you map your chart of accounts by jobs, make sure each employee and contractor is assigned to at least one job. Here's how:
Salaried employees: edit their job title.
Hourly employees can have as many pay rates or jobs as you'd like. If an employee has multiple jobs, their paystub lists each job and its associated earnings.
Note: If multiple job codes share tracking categories, there will not be separate line items when synced to QuickBooks Online. Instead, the job code wages will be lumped together.
These transactions will be exported by job code to your accounting software account. If any jobs are left unmapped, they will sync based on the original chart of accounts mappings.
Once you map your default chart of accounts, you can add more granularity by mapping your accounts by department. You can use different accounts for the different payroll items within a department. This means you can have the earnings of one department go to one account and the earnings of a second department go to a different account. This will expand the entry we send over into the accounting software.
As an example, I have two departments: Design and Marketing. Before I enabled department mappings, all regular wages earned went to one "salaries and wages" expense account. After enabling department mappings, I can use two expense accounts: a "Sales Wages" expense account and a "Marketing Wages" expense account. When running reports in my accounting software I will have this additional breakdown.
If you use QuickBooks Classes, you can also map your departments to Classes in step 9 below. The same expense account can be used for each team and have an assigned QuickBooks Class—this keeps the reports in QuickBooks much cleaner and easier to understand.
Note: If multiple departments share tracking categories, there will not be separate line items when synced to QuickBooks Online. Instead, the department wages will be lumped together
These transactions will be exported by department to your accounting software account. If any departments are left unmapped, they will sync based on the original chart of accounts mappings.
When setting up your mappings, you can associate specific project work to specific Classes. Mapping by projects (as opposed to job codes or departments) is good for businesses with multiple people in the same role and when some employees work hours in one role and other hours in another role.
If you use QuickBooks Classes, you can also map your projects to Classes in step 9 below. The same expense account can be used for each team and have an assigned QuickBooks Class—this keeps the reports in QuickBooks much cleaner and easier to understand.
Note: If multiple projects share tracking categories, there will not be separate line items when synced to QuickBooks Online. Instead, the project wages will be lumped together.
These transactions will be exported by project to your accounting software account. If any projects are left unmapped, they will sync based on the original chart of accounts mappings.
Since Gusto does not take any money for benefits or deductions, we include a mapping for benefit/deduction liabilities. This will create line items within the journal entry and accrue an amount owed for the benefit/deduction. When the benefit/deduction is then paid to the correct party, in QuickBooks Online you can offset your liability and zero out the amount owed. For more info, check out the "Offset benefit liabilities in QuickBooks Online" section of this article.
Q: If I update my mappings, can I re-sync a payroll to update the journal entry?
Q: Do you book the wage expense as gross wages or net wages?
A: Gross wages, meaning the wage expense will include employee pay, employee taxes, and employee deductions. Employer taxes and employer contributions will have their own expense line item.
Q: Do you break out individual taxes?
A: By transitioning to a third party payroll provider, tax payments will no longer come over to your balance sheet as a liability. Employee taxes are not broken out individually for mapping or in journal entries, as these values are included in Gross Wages. Employer taxes are mapped to a single account within your Gusto integration settings and will appear on individual line items in your journal entry, all associated with the same account you mapped it to in Gusto.
Q: How do I handle checks?
A: We recommend printing checks from your Gusto account or handwriting them. You can then reconcile the journal entry from Gusto when the checks are cashed by your employees. We do incorporate the amount of each check in our Journal entry.
Q: What if I won't be using one of the payroll items listed?
A: The item will still need to be mapped to an account. If the payroll item isn't applicable, nothing will come over related to the account that is selected within your entry. Only payroll items that apply to a processed payroll will populate within the synced entry.
Q: Do you support QuickBooks Online classes?
Once you've connected to QuickBooks Online from Gusto, follow these steps to manually sync any payroll from Gusto to QuickBooks.
The Journal Entry will post to your bank register for review and reconciliation.
Note: If you do not see the Sync button, please confirm your integration is still actively set up and is not disconnected.
Q: Is there a way to retroactively sync all payrolls once I enable auto-sync?
A: Auto-sync will only work for the payrolls moving forward from the time it is set up. Any payrolls run before auto-sync was enabled will need to be manually synced.
Q: What does the timestamp indicate?
A: The exact time Gusto successfully synced a payroll into the accounting software.
Q: Can I re-sync an entry that has already been reconciled?
A: You will need to un-reconcile an entry before you can re-sync it. This includes unmatching any bank transactions with the Journal Entries. QuickBooks Online considers matching as partial reconciliation.
Q: Can I sync international contractor payments to QuickBooks Online?
A: At this time, international contractor payments are not supported by Gusto’s bookkeeping integrations. These payments will need to be added manually into your bookkeeping software instead.
If a journal entry has failed to sync from your Gusto account to QuickBooks Online, QuickBooks Online will send us an error code. You can use these error codes to troubleshoot the syncing failure.
|Journal Entry has been reconciled. Please unmatch reconciled transactions before syncing again.||The Journal Entry has already been reconciled and cannot be re-synced.|| |
Unmatch the corresponding bank debits so that you manually re-sync the Journal Entry.
This can be completed from within your 'Bank Feed' in QuickBooks Online. For additional help, view this QuickBooksHelp article.
|Books have been closed. Please reopen books in QuickBooks Online before syncing.||The quarter and/or year has been closed in your QuickBooks Online account.||Open the quarter and/or year to allow the Journal Entry to be manually re-synced.|
|A mapped account is missing in QuickBooks Online. Please remap your accounts before syncing the Journal Entry.||A change has been made to your Chart of Accounts which prevents the journal entry from syncing over.|| |
Double check your Chart of Accounts mappings to ensure that each payroll item is fully mapped or make the accounts you want to use “active” in QuickBooks Online and then remap in your Gusto account.If you have Department Mappings, make sure all mappings are completed for the applicable Departments as well.
|There was an error syncing with QuickBooks Online. Please contact support.||A connection error has occurred between QuickBooks Online and Gusto. Further investigation is needed.||Please contact us from the Help section of your account.|
The date of an entry dictates what period the expense information will fall in. For example, an entry dated September 30 would fall into Quarter 3 financials, while an entry dated October 1 would fall into Quarter 4 financials. When a pay period has a payday (or check date) that falls in a different month or quarter, this can create problems when you go to balance your books.
Entry date options
Our accounting integrations give you the ultimate flexibility for reporting, allowing you to choose from three entry date options.
Note: If you elect to have the end of the pay period as your entry date, Gusto will default to the check date for any payroll with no pay period, such as an off-cycle payroll.
Change your entry date options
You can change your entry date selection anytime in Gusto.
Your payrolls will now sync over with Entry Dates based on your selection. If you need to go back and retroactively sync any payrolls with these new settings, you can do so.
Because Gusto does not take any money for benefits or deductions, we include a mapping for a benefit or deduction expense and a benefit or deduction liability. This will create accounts within your accounting software that accrue an amount owed for the benefit or deduction over time.
When the benefit or deduction is then paid to the requesting party, you can offset your liability account and zero out the accrued amount owed.
Important: When money is pulled for an FSA or commuter benefit, before it is deducted through payroll make sure you don't create an expense but rather establish a receivable. It will be expensed in payroll when the amount is deducted. At that point with the deduction, then reduce the receivable.
Option 1: Create an entry from the bank debit (created by paying the benefit or deduction) and assign that entry to the liability account to offset.
Option 2: Create a bill and associate the bill with the liability account.
When using an accounting software, there are two ways to reconcile and match expenses with withdrawals from the bank account.
Method 1: Cash is withdrawn > create a matching expense
Pull up the bank transactions from your integration with your bank account. When you see a withdrawal, create a corresponding expense.
Example: You bought a few items at the office supply store, and therefore see this bank withdrawal when looking at your bank transactions. You can now add a corresponding office supply expense for reporting purposes. The expense is now accounted for as demonstrated by the reduction in cash.
Method 2: Report an expense > cash is withdrawn > match the expense
Report a future expense. When you see the actual cash transactions, match the cash withdrawal with the expense that was previously reported.
Example: You forecast that supplies will cost $X amount of money at the beginning of the month, but the funds will not be withdrawn until the end of the month. You therefore report the expense. When the cash is withdrawn at the end of the month, you can indicate that the previously reported expense matches with this specific bank transaction.
When generating paper checks using your accounting software you may see an additional expense created on your books - this is because total gross wages are reported whether your employees were paid by direct deposit or by check.
This can cause issues when reconciling your expenses because the amount paid to employees may appear to be over reported.
Our preferred method is for you to print the checks from your Gusto account or hand write them to avoid expenses appearing as over reported. Then, you can easily reconcile the total payroll expense from Gusto when the checks are cashed by your employees.
If you are not handwriting or printing your checks through Gusto, below are the best options to avoid over reporting.
Example of Over Reported Checks
You run a payroll that costs $10,000, where your employee is receiving a $7,000 check from you. In the $10,000 expense synced over from Gusto, you can see line items for $9,000 of gross wages (this includes a $7,000 check + $2,000 in employee taxes) and $1,000 of employer payroll taxes.
When you create a check for your employee in your accounting software, it will also create an expense for $7,000. As a result, when you look at your total payroll expenses you will now see that payroll for this pay period costs $17,000. When reconciling your books, however, only $10,000 will be taken from your checking account ($3,000 for employee + employer taxes and $7,000 from the cashed check).
The check created by your accounting software has led you to over report your payroll expenses, so when you look at your profit for the year it is lower than it should be. You will need to use one of the solutions described below to reconcile the over reported check payment.
Option 1: Reduce the expense account associated with Gross Wages, indicated by your mappings in Gusto, by the amount of the employees' check and remove the check line entry prior to creating the check in your QuickBooks Online account. Reducing the Gross Wage expense by the check amount and removing the check line entry will prevent double counting.
Example: You sync over a total payroll expense of $10,000. Knowing that creating a check will over-report the expense by $7,000, you reduce the gross wage expense from $9,000 to $2,000.
Option 2: Create a liability line item and a credit line item for the check amount by editing our expense. When the checks are written you will book them against the liability and not create a new expense.
Example: You sync over a payroll expense of $10,000. Knowing that the check you create will be outstanding until cashed, you change the check line entry for $7,000 in our Journal Entry to a liability account. When you create the check, make sure you do not add it to an expense account. Instead associate it with the same liability account you just mapped the check payment to. The check will auto-reconcile when cashed.
How to edit a Gusto QuickBooks Online Journal Entry
To learn more about creating a liability check in QuickBooks Online, click here.
In order to properly track the amount of the credit and apply the credit to the federal tax owed, Gusto will pass the amount of the eligible credit through to your Xero and Quickbooks integrations.
Important: This will require the set up of new mappings to accounts in your accounting software. We strongly encourage consulting your accountant in the mapping of these accounts.
Your payroll entries will include two new components:
There’s no action required on future payroll runs if the accounting integration is set to auto-sync entries. You can pull the remaining balance of the credit in your accounting software at any time as a line item on your balance sheet.