 time. We're going to be processing payroll for the second month this time. So we process payroll on a monthly basis. Let's just kind of recap the flow of the payroll process. So I'm going to do that in our flow chart down below. So we're in the payroll basically like a vendor cycle. If it wasn't for all the complexities with taxes, then it would be basically shake hands with somebody. They would work for you or whatever, and you pay them and you basically just pay them like a vendor. But we have a bunch of withholdings and whatnot, which will change from place to place in the United States. We've got the federal and possibly state to deal with. So what we need to do then is possibly enter the time first. If they're hourly employees, although this time entry is not really required to process the payroll because you might be tracking time in some other way, or you might be using an hourly, I mean, a salaried type of system. But you can also use this time entry for the billing process as we've discussed in the past. Then of course we're going to process the payroll, which will generate payroll checks, which will be distinct forms different than other check forms. And that they'll be marked off as like a payroll type of checks so we can determine which checks are payroll versus non payroll type of checks. And this will also generate the withholdings that are taken out of the employee checks and put into a liability account as well as calculate our taxes on the employer taxes and put those into a liability account and payroll taxes. Then of course at some point after that, which we'll do shortly, we'll have to pay the payroll liabilities for the withholdings that we took and our payroll taxes. We're also going to have to deal with the 941s that are quarterly information returns, the 940 at the end of the year, the W2 and W3s. At the end of the year. So that's the general process. Note if you're a bookkeeper or if you're doing your own business, you could do this internally or you could hire someone to do it as a third party, like an ADP or a paycheck. So those are the big ones. And in that case, you wouldn't have to do so much detailed tracking internally, but you can have them do the detail tracking and then you make the adjustments for your financial reporting so that at the least you can get your tax returns prepared properly at the end of the year. And those are kind of the two main payroll options. So we turned on payroll in the system. I'm going to go back to the tab to the left because it was part of the free 30 day trial. So we turned on the payroll. Payroll is a little bit difficult. So if I go into the payroll and the overview up top, it's a little bit difficult to follow along with the payroll in a practice problem because payroll is one of those things that generally needs to be run real time. So if you're working way out into the future, for example, as you're looking at this practice problem, you might not be able to process payroll in exactly the same way. That's part of the problems with the payroll. Also, just realize that the payroll will change from quarter to quarter. So you usually want like a whole years of payroll in one payroll system. You don't really want to change payroll in the middle of the year. You can, but it's not preferred because there's caps on things like social security and federal income tax. So obviously when you do like the nine forty ones or process payroll from one period to the prior period, you compare it to the prior period. That's what we always do with accounting, but it'll change as the year goes as people hit some of these caps for like federal unemployment tax and social security and that kind of stuff. So just a couple of things to keep aware of.