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Posts are primarily about QuickBooks, Xero, expense reports, and other topics useful to small business owners, CPAs, and ProAdvisors.

 


Payroll Items & The “Use time data to create paychecks” Checkbox

March 13th, 2013

If you’ve arrived at this post, you probably got here by searching for: “payroll item id or name is required for time card employee”. That’s an error related to Payroll Items. It’s one of the most “popular” error messages that we relay through our UI to users syncing to the Intuit Cloud. Why so “popular”? Because the employee setup process in QuickBooks often leads CFOs and business owners to make a rushed decision regarding the manner in which employee time activities are handled. And, for each new employee, that can lead to this error message the first time the employee in question files a timesheet. Let us explain.

The Moment that You Set Up an Employee

Lets start from, well, the beginning. You find yourself in QuickBooks in a rush to enter some transaction related to a new employee. You realize that you never set up the employee in the first place. So, you rush to Employee Center and click "New Employee" and hope to get away with just entering the employee’s first name and last name for now, since you are in a rush.

You navigate away from the Employee Information pane after entering in the employee’s name, and you are hit with your first decision regarding the configuration of the employee in QuickBooks:

QuickBooks Employee Setup - First Question
QuickBooks Employee Setup – First Question

Lets be candid: as a small business owner, when you are in a rush to get to the finish line on one of your many varied tasks, will you actually put thought into what to answer in this popup, or will you just click what looks like the easiest option ("Leave As Is")?

Without rushing to judgment about you in particular, we’ll say that in our experience most small business owners seem to be pressing "Leave As Is" on this popup. That seems natural enough. In all likelihood you added the employee because you were in the middle of some other QuickBooks task when you realized that you had forgotten to enter the employee on their first day — so the whole roundtrip to Employee Center was a detour from what you were doing in the first place.

If you are a clicker of "Leave As Is", chances are very good that you’ll also end up overlooking the other key decisions that are configured in the Employee Info tab, including one that is crucial for determining how the employee’s timesheets are handled, and numerous decisions related to Payroll Items.

Payroll Items & "Leave as Is": Crucial for Timesheets

That "Leave as Is" might work OK for a few days, but sooner or later you’ll probably find yourself helping the employee file their first timesheet in ProOnGo, and it’s possible that you’ll end up hitting an warning like this one when you send the weekly timesheet to QuickBooks:

  • “payroll item id or name is required for time card employee”

Why the error? Because when ProOnGo sends a timesheet to QuickBooks, it’s crucial for QuickBooks to know whether/not the time is intended to flow into the employee’s payroll, or rather whether the timesheet is simply for other recordkeeping purposes (like knowing how much of the employee’s time is billable to each client). So, if your default setup in QuickBooks includes a checkmark in the following spot, QuickBooks will assume that the employee’s timesheets are required to have Payroll Items for each row. And for good reason: you’ve told QuickBooks that the time activities are expected to flow into payroll. That can only mean one thing: you’ll absolutely have to include Payroll Items in each time activity.

Use time data to create paychecks?
Use time data to create paychecks?

It’s fine if you intend to require Payroll Items in each timesheet row (we support that!), but we find that many people accidentally turn “on” the “Use time data to create paychecks?” checkbox in QuickBooks, without realizing that it triggers the consequence that timesheets are required to have Payroll Items for each time activity.

So, if you’ve recently hit the error “payroll item id or name is required for time card employee”, now you know the decision you need to make:

Do you want to include the employee’s time as an input to payroll?

  • If ‘yes’, then that’s terrific, but make sure you also require employees to fill in Payroll Items with each time activity.
  • If ‘no’, then be sure to uncheck the “Use time data to create paychecks?” checkbox in QuickBooks.

Then, you’ll be well on the way to having employees file their timesheets, and an error-free experience when sending those timesheets from ProOnGo to QuickBooks.


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