 Now we want to think about how the payroll would fit into the bank feeds. So we have our bank feed data which of course is recording the information that's clearing the bank. There's a couple options that we have for the payroll. The two primary options you have are to run the payroll through QuickBooks or to pay a third-party provider to help you to run the payroll. Either way it will typically cost more to be processing the payroll. You're gonna have to pay up or pay more to process the payroll within QuickBooks. There's different tiers. I won't go into them in a lot of detail now but you can research whether or not you want to be buying the payroll within QuickBooks or if you obviously pay a third-party provider a payroll specialist then you're gonna be paying them to help you to be processing the payroll as well. Now there are pros and cons of using either of the two methods. I would recommend when thinking about how you're going to set up the bookkeeping for your business or if you have a bookkeeping business to think about how you're going to set it up for some time because it's a complicated component and you might want to ask like a CPA that you're not planning on paying for payroll or an accountant that you're not planning on paying for payroll to give you advice and pay them simply for the advice about payroll because then you might get some advice that's not tied to actually selling you the payroll and then once you have that advice then go talk to the payroll professionals either at a third-party payroll provider like a paychecks or an ADP or something like that or to QuickBooks themselves to be purchasing the payroll. Okay let's think about the pros and cons and how the bank feeds fit into the payroll process. So just in terms of what happens if you're dealing with payroll what's going to happen well you're going to have to set up the payroll you're going to have to think about when you're going to be paying people you have some leeway to to set up your own system for that usually it be weekly bi-weekly semi-monthly or monthly on the payroll then you'll be processing the payroll which means you're going to be generating in essence payroll checks or electronic transfers decreases to the checking account periodically monthly weekly semi-monthly bi-weekly and as you process the payroll checks you're going to be having to do the withholdings you're going to have to basically deal with the fact that the federal government wants you to withhold payroll taxes you might have state governments that want to withhold payroll taxes and you might also have other deductions 401ks and whatnot that you have to deal with the withholdings on that's what makes or one of the things at least that makes payroll complicated and then of course you're going to have to pay the payroll liabilities that you withheld and then you have reporting requirements like the 941s quarterly usually the 940 at the end of the year the w2s and the w3s now note that if we didn't have all this other stuff if we didn't have the withholdings if we didn't have this kind of our benefit packages tied in healthcare and stuff that could be involved with the payroll if they're part of the benefits then payroll would just be like part of the vendor cycle we would just say okay we shook hands you said you're going to do this work for me you'll work so many hours i'm going to pay you what we agreed to pay you i'm going to write you a check or just give you an electronic transfer checking account goes down the other side goes to payroll expense no problem easy we can use the bank feeds to do it and record it even that would be easy to do however we can't do that because we have all these other responsibilities we have to do the withholdings and uh we have to tie possibly some factor of it into human resources kind of situation to make sure that we're properly categorizing someone as an employee versus a contractor that we're giving the employee the information that is required that we're in compliance with laws such as minimum wage laws and other kind of laws with regards to what we're going to pay both on the state level and on the federal level all of that stuff gets quite complex and like i say is kind of tied in to some degree with human resources which has an accounting component to it but also possibly reporting uh components to it as well so if you do that internally you pay more to do that within quickbooks and quickbooks helps you to to generate the paychecks do the withholdings process the reports and give the information to the employees that are needed but clearly doing that means that there's going to be a whole lot more detail in your quickbooks file you're going to be have to track your payroll on a payment by payment method you're going to have to have enough detail in your reports to give a pay stub to each employee showing them individually how much they have earned and what the withholding is on period by period and on a year to date basis and you're going to need the information necessary to populate and create hopefully through quickbooks the quarterly reports 941s and the year in reports the w2s the w3s and the 940s so you know that's a lot just to manage even if you're getting kind of help out within the system where where then do the bank feeds fit in well clearly you can't wait till the checks that you're paying to the to the employees clear the bank if you're processing payroll through the system because you're going to have to use this widget in essence to write the checks because that's the thing that's going to allow you to populate the proper withholdings and create the pay stubs and so on and so forth so in that case if you're doing payroll within quickbooks you're doing a full service bookkeeping system with regards to the banking transactions as opposed to what we saw up here with the other like expenses you might have the telephone expense for example you can wait till that clears the bank if it's an electronic transfer and just record it when it comes through to the bank feeds you can't do that with payroll if you're processing payroll through quickbooks because you need to use the quickbooks widget in order to generate the check and then it's going to clear the bank then you can use the bank feeds to kind of double check the and and that the check has cleared and you're using it as kind of a reconciling situation so that's the that's the one scenario that you can do now the other thing you can do is you could say well maybe i want to outsource all this stuff to a third party payroll professional and they can help me with some of the accounting stuff with sending out the pay stubs and that kind of stuff and they can deal with any kind of human resources things and possibly help me out with benefit programs that i might not that i might not be as aware of such as possibly you know health insurance and other kind of benefit for one case and that kind of stuff maybe they can help me to set that kind of stuff up so if you're doing that then they're going to handle hopefully the the creation of the 941s the 940s given the pay stub situations over and all that kind of stuff and you then just need to pull in enough information into your system to properly record the financial statements so on the financial statements if i go to the balance sheet in the income statement then usually what's going to happen when you process payroll obviously you're going to have a decrease to cash the other side's going to go to a payroll expense i'm just going to talk it out here we won't actually record it i'm just going to try to give an idea of how the bank feeds would fit into your payroll process so then you'd have an expense for payroll expense and then you'd have the liabilities that you'd have to put in place which were the withholdings that are going to be in place and then after you process payroll that would be uh this step when we record payroll after you process payroll then we're going to have to pay the liabilities that we withheld social security medicare federal income tax our portion of social security medicare federal income tax uh unemployment food