Employee Payroll Deduction Report for External Payroll

[z0mbie]

We are in the early stages of implementing a Square Register POS for a hospital cafeteria. We will not be using Square's payroll services. We want to be able to offer payroll deduction for our employees, so that leads me to a couple questions.

• We want to know how to setup each employee's customer account to be able to use this for a payroll deduction account using our external payroll.
  • I looked at House Accounts, but that doesn't seem like it will allow itemization per employee without making a house account for every employee. Plus it seems Square assumes all payments will be made thru Square, tho an external payroll deduction will not.
• If this is possible, we are ultimately looking for a report that can be run each pay period to show the deduction for each employee (on a single report for our payroll person). Then we will need to be able to clear out those accounts without payment flowing through Square.

Does anyone have any experience with this? Thanks in advance!

[TheRealChipA · Accepted solution]

Hey @z0mbie.  I’m not sure why house accounts wouldn’t work for you, as long as you don’t expect the “payments” to the house accounts to be automatic.  Here’s how the flow would work:

1. Employees would charge to their house accounts during the month.
2. At the end of the month, you would generate invoices.  As long as you aren’t using Square Invoices for anyone else, you could then export a list of invoices to a CSV to share with your payroll company.
3. As I mentioned, after the payroll was run, you WOULD have to manually “pay” each invoice.  You can pay them to cash or some other non-card payment type, though.  After you are done, all invoices should be paid so that you start off fresh the next month with the employees’ new charges.

Am I missing a reason (other than the manual payment part) that this wouldn’t work for you?

[TheRealChipA · Accepted solution]

Hey @z0mbie.  I’m not sure why house accounts wouldn’t work for you, as long as you don’t expect the “payments” to the house accounts to be automatic.  Here’s how the flow would work:

1. Employees would charge to their house accounts during the month.
2. At the end of the month, you would generate invoices.  As long as you aren’t using Square Invoices for anyone else, you could then export a list of invoices to a CSV to share with your payroll company.
3. As I mentioned, after the payroll was run, you WOULD have to manually “pay” each invoice.  You can pay them to cash or some other non-card payment type, though.  After you are done, all invoices should be paid so that you start off fresh the next month with the employees’ new charges.

Am I missing a reason (other than the manual payment part) that this wouldn’t work for you?

[z0mbie]

The only reason it looked like House Accounts wouldn't work is because it looked like I would have to make an individual House Account for all 400 of our employees, which would take a very long time and may be difficult for our dietary manager to manage ongoing.

Is that how that would work? An individual account for all of them?

[TheRealChipA]

@z0mbieAh!  That definitely changes things.  If I’d known that number I wouldn’t have made that suggestion.   So, maybe a change to that, as I can’t really think of another way using Square to do this.  How about this?

Keep in mind that this scenario assumes you don’t use Square Invoicing for anything else.

Instead of posting 400 “payments,” after you have created the invoices and sent the CSV to your payroll processor for them to use to do the appropriate deductions, you could then have your dietary manager just do a bulk delete (or a bulk cancel) of all outstanding invoices.  Sure it would look a little weird if you ever ran an invoice history report or anything like that.  But it would be pretty easy for your dietary manager to handle, I think.

I realize that setting up 500 employee house accounts is going to take time initially, but after that it should be smooth sailing.

That’s the best I can come up with, really.

[z0mbie]

Another idea: If we took all employee deduction transactions under the payment method "check" and we do not accept checks for anything else. Could I run a transaction history report that would show totals for a timeframe per customer? and use that for the actual payroll deduction?

We don't yet have our register in hand, so i'm only able to look at the dashboard right now.

Thanks for your help so far!

[TheRealChipA]

@z0mbie First, don’t apologize.  This is the sort of stuff that makes me love the Community — being able to brainstorm and help fellow sellers find solutions to challenges.  Now…

Your idea fits into the “almost, but not quite” category.  Why?  Because there is currently no stock Square report that would allow you to filter by customer.  Also, you’d still have to create a customer record for each of your employees which would be attached to each transaction.  So no time saved up front, really.

Otherwise, if you did want to do it this way, you’d have to export transactions for the given period to a CSV, then use a spreadsheet to summarize the transactions (using a pivot table, for example), to create a file to send to the payroll folks.

Obviously, either works, but I can’t think of anything to shortcut the fact that we are forcing some part of Square to do something it was not designed to do.  It works, but it comes with work somewhere.

Make sense?

[z0mbie · Accepted solution]

Well, from our old POS system, I was able to export all of our employees and import that into Square. So i have a customer account for each employee. And I understand what you mean about no report that shows "per customer" numbers, but when I go to Transactions, it seems I may be able to show all transactions for the pay period for the payment method "checks". Without any sales data tho, I cannot tell if it will show per customer or not. Do you know if that will work or not?

But yes, if i have to pull a full detail report, and manipulate the data in the spreadsheet, I can write a script to handle that pretty easily.

[TheRealChipA]

Very good.  So you are definitely on the right track, then. 

Anyway, this would work.  You’d filter the transactions for the desired time period and payment method check.  Then export the Transactions CSV.  This CSV contains customer fields like Customer ID, Customer Name which would work for payroll as long as those matched up.  Either you or your payroll company would have to summarize the transaction totals by Customer ID and you’d be good to go.

[z0mbie]

Thanks so much for talking it through with me. I'm going to try it today; we just got the equipment. Cheers!

[TheRealChipA]

You’re welcome. Happy to help. Don’t hesitate to reach out here or in a PM if you run into any issues.