QBO: Troubleshooting Payroll: Paid from the wrong account

QBO: Troubleshooting Payroll: Paid from the wrong account

If you have two Checking accounts, and you run Payroll out of the wrong account, it’s tricky to fix.

You can tell this happened when you see Payroll transactions in both Checking accounts: QB Payroll ran it out of one account, but the checks really were cashed out of the other. You will also notice that your Payroll Expense has been doubled for the month.

Once you run Payroll, QBO doesn’t let you edit the source account, so there’s no way to move the paychecks from one account to the other. But here is the fix!

1. Fix your Payroll Settings so that moving forward, the checks are written out of the correct account.
2. In the account where the checks were paid from in real life, open each paycheck and change the Account Category so that instead of Wages, it points to the Checking account QBO THINKS the checks were paid from.
   • This reduces the Payroll Expense.
   • It also puts the money back in the account QBO thinks the checks were paid from.
3. When you reconcile the “THINKS” account, you’ll see offsetting entries for the erroneous charge and the money put back in. Check off both to equal $0.

Now the payroll dollar amount is still correct, and even though it was debited from the wrong account, the expense came from the correct account.