Timecards & Payroll Best Practices

Timecards are captured in Contractor Foreman to allocate labor to projects and cost codes, while payroll is processed in QuickBooks Online Payroll or another payroll provider. Contractor Foreman handles labor tracking and job costing while QuickBooks handles payroll processing, payroll taxes, liabilities, and financial reconciliation.

Critical Workflow Requirement

This process should not be handled differently, or it can create reporting issues, duplicate labor costs, inaccurate job costing, and overstated financials. Labor costs in Contractor Foreman are intentionally treated differently than financial costs in QuickBooks because Contractor Foreman is designed for operational labor allocation and job costing while QuickBooks is the official accounting and payroll system of record.

Why Labor Is Separate Between Systems

Timecards and labor costs are intentionally not found in the Financial Tab inside Contractor Foreman projects because they do not stand for true financial transactions in QuickBooks. Contractor Foreman tracks time activity and operational burden allocations only. The actual payroll financials, payroll liabilities, payroll taxes, and net pay transactions stay entirely inside QuickBooks.

Employee Directory Labor Rate Setup

Burden rates or wage rates are stored directly within each employee directory profile that uses timecards inside Contractor Foreman. Rates may be based on gross wages only or full burden rates depending on how the company chooses to distribute labor costs across projects. Every employee, regardless of how they are paid, must have a labor rate assigned under Project Settings. Only one labor rate can be selected to register labor costs against projects. If labor rates are missing from employee directory records, Contractor Foreman timecards will not calculate labor costs against projects correctly.

System Responsibilities

Contractor Foreman handles employee time entry, mobile clock-in/out, labor allocation, burden calculations, labor reporting, and project job costing. QuickBooks handles payroll processing, tax calculations, payroll liabilities, direct deposits, payroll accounting, journal entries, and bank reconciliation.

Calculating Burden Rates

Burden rates are calculated using gross wages or salaries, not net pay. For salaried employees or owners taking draws, convert weekly gross wages or salary into an hourly equivalent by dividing weekly gross compensation by 40 hours. The goal is to calculate a true hourly labor cost allocation for operational job costing. Burden rates should include gross wages plus overhead costs such as payroll taxes, workers compensation, benefits, and company labor overhead.

Understanding Timecard Labor Burden/Wage vs third party Payroll systems

Timecards in Contractor Foreman distribute gross wages plus overhead burden rates to projects for operational job costing purposes only. Payroll itself is based on employee net pay after taxes and deductions and stays entirely inside QuickBooks. Labor burden/wage allocations from Contractor Foreman will never post back into QuickBooks financial reports.

It is important to note that QuickBooks Time does not integrate with Contractor Foreman Timecards and Timecards in Contractor Foreman will need to be adapted for correct time tracking.

Syncing Time to QuickBooks

Time entries sync from Contractor Foreman into QuickBooks as time activity records only.

The sync does not create payroll expense journal entries, payroll liabilities, or payroll financial transactions. Imported time activities in QuickBooks are used solely to populate payroll hours for payroll processing.

Project Allocation in QuickBooks Payroll

If customers need to assign payroll costs to projects directly inside QuickBooks payroll checks, this should only be done using journal entries. Journal entries never sync back into Contractor Foreman. Payroll entered as bills, checks, expenses, or payroll transactions assigned directly to projects may create duplicate labor reporting in Contractor Foreman and sync issues.

Labor Cost Items & Customer Billing

Labor rates charged to customers are supported separately inside the Labor Cost Items database in Contractor Foreman. These labor cost items are customer-facing billing rates used on invoices and proposals only. Internal burden rates are operational cost calculations based on gross wage plus overhead allocations per project and should not be confused with customer billing rates.

Avoiding Double Expense Issues

Net payroll checks, payroll taxes, payroll liabilities, and payroll financials should never sync back into Contractor Foreman because labor burden allocations already exist for operational reporting purposes. Syncing payroll financial transactions back into Contractor Foreman would create duplicate labor expenses and distort project profitability reports.

Labor costs are intentionally treated separately between systems to prevent double counting.

Operational Best Practices

Employee records should match exactly between Contractor Foreman and QuickBooks.

Require supervisor review before payroll sync and perform weekly reviews comparing Contractor Foreman labor totals to payroll hours in QuickBooks.

Common Mistakes to Avoid

Avoid missing cost codes, missing employee labor rates, processing payroll before supervisor approval, duplicating payroll entries in both systems, syncing payroll financials back into Contractor Foreman, assigning payroll transactions directly to projects in QuickBooks, failing to update wage rates, and neglecting reconciliation procedures.

Final Summary

Contractor Foreman handles labor tracking, labor burden allocation, operational labor reporting, and project job costing while QuickBooks handles payroll processing, taxes, payroll liabilities, payroll accounting, and financial reconciliation. Keeping labor costs separated correctly between systems prevents duplicate expenses, inaccurate financial reporting, and inflated project labor costs.