What are the advantages and disadvantages of using a company like ADP to do payroll versus

completing it on your own in Quickbooks? Why would you want to track employee time against
specific customer jobs? How does QuickBooks handle this functionality?

Advantages and Disadvantages of using a company like ADP for Payroll.

ADP or other payroll service companies offer a wide variety of services either a la cart or in
packages. Smaller growing companies may not have the resources to hire or handle payroll
within the company so using an outside resource makes sense. The main issue with an outside
resource is someone still has to collect the data and send the information over prior to their cut
off time. Another disadvantage of using an outside resource is losing touch with your
employees, payroll issues are off site and can be more difficult to correct.

QuickBooks (QB) includes a payroll feature that will quickly calculate payroll for all employees.
This feature includes gross pay, withholdings, deductions (medical, dental, life insurance,
including wage garnishments), and net pay (Villani and Rosa, 2016). QB payroll includes a
feature that allows employees to access their paystubs online as well as their year-end W2
statements which most employees like. There is a full service QB feature that also includes
filing and paying tax liabilities online. This feature makes what could be an intimidating and
daunting tax filing report to simply the click of a few buttons and both the filing and payments
are done online. Personally, with all the features QB offers I couldn’t imagine out sourcing
payroll.

Tracking employee time on jobs and how QB manages this functionality:

Companies would want to track employees time on a specific job to be sure they are staying
within the job budget as they projected or bid to the customer. Time tracking also allows for a
more accurate profit/loss on each job. Managers would want to track this data to discover any
deficiencies in job estimations or job protocols. We cannot make a change for a greater profit
margin or to run a job more efficiently if we are not tracking all aspects of the job including man
hours utilized.

QB manages man hours per job through the daily time window and the weekly timesheet
window. On either of the time windows the customer job can be noted, and the “billable” box
can be checked. QB then ties those hours checked as “billable” to the customer job. QB will
open a pop-up reminder of billable hours when payroll is entered or when a new invoice for a
customer with billable hours attached is created. QB makes tracking billable hours very easy.

Just a side note when inventory is received for a specific job, the payable can be checked as
billable and associated with the customer job similarly to hours worked. When a new invoice
for the customer is created QB opens a pop-up asking if you want to add the billable inventory
to the invoice.

Reference:
Villani, K., & Rosa, J. B. (2016). Computerized accounting with QuickBooks 2015. St. Paul,
MN: Paradigm Publishing.