Understanding Payroll Liability Balances in QuickBooks After Importing from Friday #

Overview #

After importing payroll from Friday into QuickBooks, you may notice balances appearing on the balance sheet under payroll liability or offset accounts. This occurrence is not always indicative of an error. In many cases, Friday records payroll-related amounts for payroll and tax reporting purposes, while the actual payment is made outside of Friday. As a result, QuickBooks may show a balance that needs to be cleared manually by your bookkeeper or accountant.

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Common Accounts Where Balances May Appear #

Balances may be found under accounts such as:

• Employer Deduction Offset
• Employee Taxes (not common)
• Employer Taxes Offset (not common)
• Payroll Liabilities
• Health Insurance
• Dental Insurance
• Vision Insurance
• Other payroll liability or offset accounts

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Why This Happens #

Friday imports payroll activity into QuickBooks based on payroll events. However, not every payment related to payroll activity is processed by Friday.

Example Scenario:

• If your company pays health, dental, or vision insurance directly to the provider, Friday may still record the employer-paid benefit amount for payroll and W-2 purposes.
• Since Friday does not make the insurance payment, it cannot automatically clear that balance in QuickBooks.
• The balance remains until it is manually cleared when the actual payment is recorded in QuickBooks.

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Example Scenarios #

Employer-Paid Health, Dental, or Vision Insurance #

If you see a balance under Employer Deduction Offset, it may relate to employer-paid benefits such as:

• Health insurance
• Dental insurance
• Vision insurance

Typical Process:

1. The benefit amount is recorded in Friday.
2. The amount is imported into QuickBooks.
3. The company pays the insurance provider directly.
4. Friday does not make the insurance payment.
5. The balance remains in QuickBooks until cleared manually.

Resolution:
Your accountant may need to create a journal entry or adjustment in QuickBooks to move the amount from the payroll liability or offset account to the appropriate insurance expense account, such as:

• Health insurance expense
• Dental insurance expense
• Vision insurance expense

Your accountant should confirm the correct QuickBooks treatment before making any changes.

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Canceled Payroll with Taxes Already Paid #

If payroll was processed and later canceled, but tax payments were already sent to the tax agency, QuickBooks may show a balance in:

• Employee taxes
• Employer taxes
• Employer Taxes Offset
• Employee Taxes Offset
• Other tax-related liability accounts

Resolution:
The tax agency may need to refund the overpayment or apply it as a credit. Friday may not be able to clear that amount immediately if the tax payment was already sent.

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Steps to Review the Balance in QuickBooks #

To determine the source of the balance:

1. Open QuickBooks.
2. Go to the balance sheet.
3. Locate the payroll liability or offset account with a balance.
4. Click into the balance.
5. Review the transactions comprising the balance.
6. Identify the employee, payroll date, or benefit/tax item related to the amount.

This will help you determine if the balance is connected to:

• Employer-paid benefits
• A canceled payroll
• A tax payment
• A reimbursement
• A QuickBooks mapping issue
• Another payroll transaction

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What Friday Can Assist With #

Friday can help you:

• Identify which payroll or employee transaction created the balance
• Review whether the balance is related to:

– A payroll import
– A canceled payroll
– Employer-paid benefits
– Payroll taxes
– A possible mapping issue

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What Your Accountant May Need to Handle #

Your accountant may need to:

• Create a journal entry
• Move the balance to the correct expense account
• Split the balance between health, dental, and vision expenses
• Record a refund or credit from a tax agency
• Reconcile the balance against actual payments made outside of Friday

Note: Friday cannot provide accounting or tax advice. Your accountant should confirm the correct treatment.

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Important Note #

If Friday did not make the payment, it cannot automatically clear the balance in QuickBooks. For example, if your company paid the insurance provider directly, the payment must also be recorded correctly in QuickBooks to clear the liability or offset account.

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Suggested Bot Answer #

If you’re seeing payroll liability or offset balances in QuickBooks after importing payroll from Friday, it depends on what the balance is for.

• If the balance is related to employer-paid benefits like health, dental, or vision insurance, Friday records those amounts for payroll and W-2 purposes. However, if your company pays the insurance provider directly, Friday does not clear that payment in QuickBooks. Your accountant may need to clear the balance manually, usually by moving it from the payroll liability or offset account to the correct insurance expense account.
• If the balance is related to a canceled payroll where taxes were already paid, the tax agency may need to refund the overpayment or apply it as a credit. You may need to check with the agency directly.

To review the issue, click into the balance in QuickBooks and check which payroll, employee, or transaction is creating the amount.

We recommend checking with your accountant before making any QuickBooks adjustments.

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When to Contact Friday Support #

Contact Friday Support if:

• You do not know which payroll created the balance
• You are unsure which employee or transaction the balance is tied to
• The balance is related to a canceled payroll
• You believe the QuickBooks import may be incorrect
• You believe Friday should have reversed or refunded something
• You need help understanding which payroll item created the balance

When reaching out, please include:

• The QuickBooks account name showing the balance
• The amount showing in the account
• The payroll date, if known
• The employee name, if known
• A screenshot of the QuickBooks balance detail, if possible