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Tracking Employee Time

QBD Overview
July 16, 2020

If you are recording employee hours for customer billing or payroll, you need to make accurate entries. Let QuickBooks help.

Tracking sales of goods is easy in QuickBooks. Create a sales receipt or an invoice. Pick the product the customer requests along with the quantity and then save the transaction. QuickBooks will adjust the appropriate inventory level and record the purchase correctly.

But when you account for services that you have sold, that can get complicated. When you need to charge your customers for labor, consulting, or any service and bill by the hour, it is necessary to set up records for billable time and also track hours spent on each task. Fortunately, both chores are made simple by QuickBooks.

You will also use the same tools to record hours worked by employees for payroll. With QuickBooks you can track time with either standard timesheets or individual records. Here are the things you need to know.

Preferences for Editing

You will need to set up QuickBooks for the task before you can track time. Do this by opening the Edit menu and choosing Preferences. Choose Time & Expenses. The Company Preferences tab should be highlighted. Then click in front of Yes beneath Do you track time? When this is not already filled out, click the down arrow next to First Day of Work Week and open the list to choose the right day. When necessary, check in front of Mark all time entries as billable. Then click OK.

Before you can track time you need to give QuickBooks some information

While the Preferences window is open, click on Sales & Customers followed by My Preferences. When you are creating invoices for customers with billable time, QuickBooks opens a window that lists billable services. Get this window via Prompt for time/costs to add. Or you can display a box that asks if you wish to include such items which reads ask what to do. Choose one of these or use the “don’t add any” option and then click OK.

Entries for Individual Time

For this task click next to Enter Time on the home page. Alternatively go to Customers and Enter Time or Time and Enter Single Activity. When the window opens check that the date is appropriate for the service provided. Then go to the Name field and pick the right employee and the correct Customer:Job.

Note: Be certain to note when this is for a specific job and not a main entry for the customer.

Window for Time/Enter Single Activity

Then choose the Service Item which is the exact work that the employee carried out. Here you have two choices. Enter the exact duration of work that was done or click Start and begin an automatic timer. Make sure to check to box in the right upper corner for billable work. And, add any appropriate Notes.

If you will have to set up QuickBooks for payroll in order to see fields for Payroll Item for pay type and WC Code for workers compensation. When you need to see these fields, click the upper right horizontal line to minimize the Time/Enter Single Activity window. Then click Employees on the toolbar or go to Employees/Employee Center and double click the employee’s name. Then click to the left on Payroll Info. Near the bottom there will be a line saying Use time data to create paychecks. Check the box and click OK. Now reopen the window for Time/Enter Single Activity which the double box icon on the left lower part of the screen. You should see your two fields there. Fill in all necessary fields and save.

Note: If you still doing your payroll manually you will find it a lot easier to track time, pay employees, and charge customers by using payroll in QuickBooks. To get this set up properly, contact us at Exigo Business Solutions.

Although it is not hard to make entries for time spend on jobs it takes up a lot of your time. This is especially true when you have lots of employees doing getting paid by the hour and for whose services you charge customers by the hour. Check with us next month when we look at the Timesheet feature in QuickBooks.

We will show how to find the time entries you have created and how to deal with issues that arise when QuickBooks time-tracking is not sufficient for what you need. For any of your QuickBooks accounting requirements feel free to contact us at any time.

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QBD Overview

A collection of articles related to implementing Quickbooks Desktop in your business.
Ronald B. Allen
CEO, Profit First Professional, Fix This Next Founding Advisor
Principle of an accounting firm that’s committed to educating business owners on their financial health, providing a trans-formative strategy and helping them experience their profit!