How to reconcile the labor distribution to the payroll register
This article discusses how to reconcile the labor distribution to the payroll register for a company that is using a third-party, outside payroll system such as ADP, Paychex, Inuit Online Payroll, etc. It does not discuss this process when using Quickbooks Desktop payroll.
The labor distribution is a process that allocates labor costs to jobs, service items, and general ledger accounts in Quickbooks. It is a process that is required for DCAA compliance. The allocation is based on the employees' timecards, which are either entered into Quickbooks or imported from a third-party timekeeping system. A mock payroll is run, which produces the labor distribution. Once the labor distribution is created, it is reconciled to the payroll register obtained from the third-party, outside payroll system. This article discusses the last step, the reconciliation of the labor distribution to the payroll register.
Select the "Labor Distribution Report by Employee" from the drop down menu in Quickbooks. You will find this report in the Memorized Reports folder and the DCAA sub-folder (see here about the DCAA sub-folder).