Enhancing Your Bookkeeping System with a Payroll Module

So a typical add on to a normal bookkeeping system like a QuickBooks Online would be to add on a payroll module inside QuickBooks. Now what this does for you is it allows you to pay employees on a regular basis, whether you're weekly, biweekly, monthly, whatever that looks like for you. It also allows us to do direct deposit in there as well, which allows you to essentially be an up to date current employer. That makes it easy for your employees to get paid. Now you can also use a manual system. Canada Revenue Agency has a payroll website that you can put in gross wages. It calculates deductions for you. But it's important that you make sure that you are taking off the appropriate deductions because if you don't as an employer, you could be on the hook for making the employee contributions as well. If you're not doing that properly, that could be a big cost to you. And also you could get hit with penalties and interest associated with not filing appropriate payroll records. So you need to have a system that's keeping track of that and providing you access. Do you know exactly how much you need to pay the government? It's a requirement. You're withholding those, those amounts from your employees. You do have a requirement to remit those on their behalf because it is their money ultimately that you're paying to the government on their behalf. So make sure that you're utilizing that sort of formalized payroll system to the greatest extent possible. Now another question that comes up is related to essentially employee reimbursements. How do we best manage employee reimbursements? Now, employee reimbursements can be put as a payment on payroll, as a reimbursement in there, it's a non taxable repayment to the employees. It can be added to their paycheck with no deductions required. And typically a system that I would recommend is that you have a expense requisition form where employees fill that out and submit it to a payroll department or to you yourself as the business owner essentially to say, I, I paid this amount, here's the invoice or the receipt that's attached to it and I need to be reimbursed for it. Again, you have a responsibility to maintain those records so that anything you're paying to the employees is a deduction to the business. And as, as you can expect, if you have a deduction in your business, you need to have support as to why that deduction is taking place. You also have to have rationale why it's not having payroll deductions as well. So it's important to have expense reimbursement forms separate from payroll, but you can include that repayment to the employee as part of a payroll deposit as well.