QuickBooks Question

[jasdlm]

I do payroll for a company where the insurance company autodrafts the health insurance at the end of the month prior to the month covered. The premiums are withheld from the employee checks 50% on the first of the month and 50% in the middle of the month. Essentially, I have a prepaid expense in July, for example, for August's health insurance. Does anyone know how I can zero out the payroll liabilities (after the second paycheck) without creating a dummy check or making two sets of journal entries? I am just wondering if there is a QB method for going directly from the prepaid expense to the liability account.

Thanks!

[ILLMAS]

Prepaid health insurance, general liability and workmen comp are always a pain to account for every month, I would recommend if the amount isn't that large, just go ahead an expense it every month and recognize the prepaid at the end of the year.

[rfassett]

I had to do some mental gymnastics to figure out what you are trying to accomplish. You do not have a prepaid expense if I am understanding you correctly. Insurance company autodrafts on July 31st for August health insurance coverage - correct so far? On the first on the July half of the employee withholding is recorded as payroll withholding (health insurance) liability and on the 15th of July the other half of the withholding is booked the same way.

So on July 31st you record the reduction in the checking account and record the expense reduced by the employee withholding. I think you can do this through the pay payroll liabilies system in QuickBooks. When the payment instrument is created (for the autodraft) you can modify the distribution of the payment there.

If I have misunderstood what you are attempting to accomplish, I apologize.