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      How does the Gusto integration work?

      Gusto (formerly ZenPayroll) integrates with FreshBooks to bring you payroll, W-2s, 1099s, payroll runs and direct deposits. Once connected, any payroll you run in Gusto will be automatically imported into your FreshBooks account in the Expenses section, already categorized for you. Gusto is available to US customers and you can learn more about integrating with Gusto here


      Set Up

      To set up Gusto with your FreshBooks account, use these steps:

      1. Click on the gear icon in the top left corner
      2. Click on Payroll
      3. If you already have a Gusto account, click on the Connect to Gusto link
      4. If you’ve never set up Gusto before, click on Try Gusto to get started with a free 2-month trial
        1. You’ll be taken to Gusto’s signup page, enter your signup details and click on Get Started
        2. Add your Password and any extra details, then click on Create My Account
      5. After your Gusto account’s set up, inside Gusto, click on the App Directory tab
      6. In the Find an app search bar, type in FreshBooks and click on the result
      7. Click on the Connect button
      8. Then choose the at option

        Connect to FreshBooks button.
      9. Enter your FreshBooks login credentials (if prompted to) and click on Allow Access to authorize Gusto to access your FreshBooks account
      10. Choose the business (if you have multiple) that you’d like Gusto to connect to and click on Connect to FreshBooks
      11. Once connected, click on the edit button to customize your Account Mappings to determine which Expense Categories you'd like Gusto to use when importing expenses into your FreshBooks account (Parent Categories can only be selected). If you’re using Bank Reconciliation as well, we recommend working with your Accountant on the mapping of your Gusto payroll expenses.


      Additional Settings

      1. In your Gusto account, click on Edit Settings while inside the FreshBooks Integration section

        Edit Settings link inside Gusto integration.
      2. ForAuto-Sync, choose to sync automatically or manually after each payroll run (we recommend leaving it set to Yes)
      3. Choose to enable Department Account Mapping if needed
      4. For Entry Date, choose between which Date you’d like Gusto to use for creating Expenses in FreshBooks (Check Date, Debit Date, or End of Pay Period)
      5. When you're done, click Save and your integration is all set to go.


      Run Payroll

      In your FreshBooks account, you can run payroll with these steps (or for more details, go to Gusto’s steps here):

      1. In your FreshBooks account, click on the gear icon in the top left corner
      2. Click on Payroll
      3. Click on the Run Payroll in Gusto button
      4. You’ll be taken to your Gusto account, choose your Regular Payroll Period and select Run Payroll
      5. Check over the Hours & Earnings and click Save & Continue
      6. Look at Time Off and click Save & Continue to proceed
      7. Review the details and click Submit Payroll to finish
      8. Your Payroll run will be imported into FreshBooks as Expenses.

      Note: If you cancel your payroll run inside Gusto, all imported expenses in your FreshBooks account by Gusto will be removed automatically.



      What happens to my Expenses if I have both the Gusto integration and a Bank Connection?

      If you have Gusto integrated, your payroll runs are automatically imported as Expenses. If you also have a bank account connected via Bank Connections that is also the same account you use for payroll runs, you will also see the same payroll runs automatically imported as Expenses too.

      To handle the duplicates, you will need to either:

      • Delete all payroll expenses imported in by Gusto and keep the bank account imported ones
      • Or delete all payroll expenses imported in by your bank account and keep the Gusto imported ones

      This ensures you only have one copy of your payroll expenses in your Expenses, rather than double-reporting them.

      How do I disconnect the Gusto Integration?

      1. In your FreshBooks account, click on the gear icon in the top left corner
      2. Click on Payroll
      3. In the Manage Your Gusto Integration, under Account Details, click on Disconnect Integration
      4. Click OK to confirm and the integration will be disconnected. Your Gusto account will still be active and can be accessed directly here.

      How can I match my Gusto payroll transactions in Bank Reconciliation?

      Gusto will import specific Expenses into your FreshBooks account, which will also appear in your Bank Rec under FreshBooks Entries:

      • Gross Wages - Depending on your setup in Gusto, this may also be imported with more details into different Expense Categories - by default, this is assigned the Subcategory of Wages, under the Category of Other Expenses
      • Employer Taxes
      • Payments to contractors (if applicable)
      • Reimbursements to employees (if applicable)

      When your payroll is withdrawn from your bank account, these entries appear in your Bank Rec under Unreconciled Bank Transactions:

      • Total employer and employee taxes - Both State and Federal are combined into one entry
      • Net pay for employees
      • Payment to contractors (if applicable)
      • Reimbursements to employees (if applicable)
      • Payments for child support benefits to employees (if applicable)

      To reconcile Gusto entries, because matching many to many transactions in Bank Rec isn’t available yet, you will need to mark these imported transactions as Transfers. The effect on your books is an increase in your overall Expenses and a decrease in your Bank Account (part of the Cash Parent Account).

      This will result in an overall net zero effect on the Petty Cash Account - the amount being reconciled will first decrease it upon import, then increase it upon being Marked as Transfer.

      Reconcile Gusto entries using the below steps:

      1. In your Bank Rec widget, find the Gusto transactions for one payroll period under Unreconciled Bank Transactions, add them up and ensure the total equals the Gusto transactions under FreshBooks Entries too
      2. If both totals match, check off the boxes next to Gusto transactions under Unreconciled Bank Transactions
      3. Then click on Mark As button
      4. Select Transfer
      5. Leave the Gusto transactions under FreshBooks Entries unmatched.


      • The Gusto integration does not withdraw from your bank account for employee benefits but it still imports into your FreshBooks account as Expenses - work with your Accountant to record a Journal Entry for the Liability related to the benefits in FreshBooks
      • Any payments made for child support garnishments are already recognized by Gusto as an expense and are withdrawn from your bank account as a separate transaction

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