Transition to using journal entries with Quickbooks Online
What is different
We will now be syncing over your payroll expenses to QBO in journal entry format. We will no longer be pushing over payroll details as standard QBO expenses. Journal entries will only post to your bank register and will no longer post under expenses. The standard QBO expenses can be accessed in both locations. Any reversed payrolls will sync over now as well.
Why we changed the integration
Pushing journal entries allows us to be much more granular with our expense information, specifically how cash will be pulled from your account. Standard QBO expense entries are limited to using one cash withdrawal amount for reconciliation purposes. The problem with that is Gusto pulls cash in a series of withdrawals - and if you are writing checks, potentially many more. This results in a reconciliation headache.
The use of a journal entry format allows us to apply multiple cash withdrawals to one expense entry. Meaning when it comes to closing your books and reconciling your bank account, the transactions will match up perfectly. They will automatically reconcile and you will only need to approve the transactions.
How to change to the new reconciliation method
- Login to your Gusto account.
- Navigate to the Settings tab.
- Click edit next to your QBO integration.
- In the Bank Account section change the dropdown back to your original bank account.
- Now you are all set to have your payrolls sync over as Journal Entries in the future.
Questions and Answers
Q: Will this change my expense accounts?
A: No. All expense accounts will remain the same and nothing will change on how the amounts show up in your profit and loss statements and expense reports. The change is being made for reconciliation purposes only.
Q: What if I don't want to use the new method?
A: You can continue to use the clearing account method. Simply continue to transfer cash withdrawals to your clearing account, and the journal entries will post to the clearing account register in the same way the standard QBO expenses did.