Integrating Patriot Payroll with Patriot Accounting

Background

Patriot Software offers the functionality of an integrated payroll and accounting system. If you use both Patriot Payroll and Accounting, a journal entry will be automatically created in your Accounting software each time you run a payroll.  The entry will include gross pay, net pay, employee and employer taxes, and any deductions and contributions you use. You can view these payroll transactions on your  General Ledger report.

How to integrate Patriot Payroll with Accounting

If you are a brand new customer and have selected both the accounting and payroll software, you will be taking through the accounting setup wizard, where you will select your accounts and the way you want your payroll integration in your accounting software.

If you have already set up your Accounting software, and add the payroll later, you will be prompted to make choices for your integrated accounting and payroll system under Settings > Payroll Settings > Payroll Integration Options.

First, you will choose to either record a summary entry or detailed by employee when integrating your Accounting software for the first time.

• If you choose “One total summary,” you will see the total net payroll amount appear in your General Ledger report for that pay date.  
• If you choose “Separate check detail,” you will see each employee’s name as an individual row in your General Ledger report.

Next, choose from your Chart of Accounts which accounts you would like to use when recording journal entries from payroll.

Gross Pay – Gross pay is the total compensation you pay to your employees.

Net Pay – Net pay is the actual check amount paid to the employee after taxes and deductions have been taken.

Employee Tax – Employee taxes are your employee’s tax obligations that you withhold from their pay and remit on their behalf.

• If you are a Basic payroll customer, select the liability account to apply these entries.
• If you are a Full-Service payroll customer, select the asset account,(typically a bank account), these taxes will be withdrawn from.

Employer Tax (Expense) – This includes all employer taxes such as Social Security, Medicare, unemployment, and any other employer-paid taxes you may have in your state.

• Both Basic and Full-Service Payroll customers should select the expense account to apply these entries.

Employer Tax (Remittance) – This represents the asset or liability account you will use to record your employer taxes expense.

• If you are a Basic payroll customer, select the liability account to apply these entries because you will be remitting these taxes later on your own.
• If you are a Full-Service payroll customer who has completed the tax filing setup, select the asset account (typically a bank account) these taxes will be withdrawn from. Patriot will collect these taxes from your account and remit them on your behalf. Because Patriot is immediately collecting these taxes, they are no longer considered a “liability” for your accounting purposes.

Employee Deductions – This includes all employee deductions, such as 401(k) or health insurance. You will only see this if you have at least one company level deduction set up in your Patriot Software payroll account. You will enter an account for each employee deduction.

Employer Contributions – This includes all employer-paid contributions such as employer 401(k) contributions or the company portion of health insurance premiums.  You will only see this if you have at least one company level contribution set up in your Patriot Software payroll account. You will be required to enter both an expense and liability account for each company level contribution in your Patriot Software payroll account.

If you have already set up your Accounting software, you will be prompted to make choices for your integrated accounting and payroll system under Settings > Payroll Settings > Payroll Integration Options.

If you currently use cash basis and are a basic payroll customer or use deductions or contributions, you will need to change to “modified cash basis,” so that you can create a liability account for taxes and/or deductions and contributions.   For details explaining the difference, see Which Accounting Basis Should I Use?

If you make any payroll changes that affect your journal entries, such as adding a new deduction, you will be reminded to update your payroll integration options before you run your next payroll.