QuickBooks Desktop is a desktop accounting software for businesses who need industry-specific features and reporting. QuickBooks Desktop features include inventory tracking and job costing with the beauty of online collaboration and the speed of running QuickBooks Desktop on your local machine.
With our QuickBooks Desktop integration, you can export an Intuit Interchange Format (IIF) file containing your payroll information and upload it into your QuickBooks Desktop account. This is also compatible with QuickBooks Enterprise software. You can upload your chart of accounts directly from QuickBooks Desktop 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 and Gusto departments.
Connect to QuickBooks Desktop from Gusto
The option to export a Gusto IIF file into your QuickBooks Desktop account will be available the next time you run payroll.
Total wages, taxes, benefit deductions/contributions, reimbursements and contractor payments will now export to your QuickBooks Desktop account each time you run payroll.
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.
Unlike online accounting integrations (QuickBooks Online, FreshBooks, and Xero), QuickBooks Desktop doesn't receive data through an automatic sync because it's an offline product. Data is instead exported to an Intuit Interchange Format (IIF) file, which you will download from Gusto and upload to your QuickBooks Desktop account.
To export your payroll to QuickBooks Desktop, you'll need to first set up QuickBooks Desktop in Gusto—learn how in the Connect to QuickBooks Desktop from Gusto dropdown above.
When setting up the QuickBooks Desktop integration with Gusto, you'll be prompted to map the following Gusto payroll items:
The more accounts you choose when setting up the accounting integration, the more detail there will be in the payroll entry sent to the accounting software. 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'd like to break out different types of earnings into different expense accounts you can make different account selections for each earnings type. For example, you could have one expense account for vacation pay and a different expense account for overtime.
To add new accounts, you should create those accounts in QuickBooks Desktop and re-upload your QuickBooks Desktop chart of accounts. All the options in Gusto are generated based on what's in that file. Once you have mapped your chart of accounts, data can be exported to an Intuit Interchange Format (IIF) file, which you will then download and upload to your QuickBooks Desktop account.
Unlike online accounting integrations (QuickBooks Online, FreshBooks, and Xero), QuickBooks Desktop does not receive data through an automatic sync since it's an offline product. Data is instead exported to an Intuit Interchange Format (IIF) file, which you will then download and upload it to your QuickBooks Desktop account.
Upload your chart of accounts
Mapping your chart of accounts correctly will allow Gusto to export an IIF file that matches the accounts in your QuickBooks Desktop setup. You can upload your account names from QuickBooks Desktop by following the instructions below.
Note: Refer to Intuit's help articles for more information on IIF files.
Department mappings are another way to add additional granularity. With department mappings 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 have an accounting integration, you can group your payroll information by department with your chart of accounts. Mapping by departments (as opposed to job codes or projects) is good for businesses who want to better understand payroll expenses of a department or a division.
These transactions will be exported by department to your accounting software account. Any employees or contractors not within the enabled department will sync using the Default Account 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 Desktop you can offset your liability and zero out the amount owed.
Gusto departments and QuickBooks Classes often mirror each other. This means payroll expense information synced over through the Gusto/QuickBooks Online or QuickBooks Desktop integration for a Gusto department can be tagged with a corresponding QuickBooks Class. 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.
Mapping by department is good for businesses who want to better understand the payroll expenses of a department or a division.
Map Gusto departments to QuickBooks Classes
The expense and liability line items will now be tagged with a QuickBooks Classes based on the mapping selections.Example case
I have two departments set up in Gusto, one for my engineering team and one for my marketing team. I have two QuickBooks Classes I am using to categorize my expenses in QuickBooks, an "engineering" class and a "marketing" class. When using my Gusto and QuickBooks integration, I'd like the payroll expense detail which syncs in my Journal entry (i.e. regular wages, employer taxes, benefit expenses) for my engineering team and marketing team to be tagged with their corresponding classes.
In Gusto under my integration settings, I can now add team mappings for my engineering and marketing teams. Once they have been added, I can select a QuickBooks class for each team. The “engineering” class for my engineering team mapping and the “marketing” class for my marketing team. When my payroll detail syncs to QuickBooks from Gusto, the classes will be included in the entry based on my selection.
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: We do not break out individual taxes. By transitioning to a third party payroll provider you will no longer have tax payments coming over to your balance sheet as a liability.
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 want to break out each employees' payroll information?
A: You will want to create a department for each employee and use separate accounts to break out their specific payroll items.
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.
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 check and associate that check with the liability account to offset.
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.
If you have a QuickBooks Desktop account, one way to reconcile expenses is to set up a payroll holding account with the title: Gusto Payroll Clearing Account in order to isolate the Gusto payroll expenses and the individual bank transactions. This will effectively match and reconcile both items using only aggregate amounts.
Note: This process will not have any financial statement implications. It will only assist in the closing of the books.
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 Gusto 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 Desktop 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 Desktop Journal Entry
Learn more about creating a liability check in QuickBooks Desktop.
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.