As a small business owner should I have a separate account for payroll?
Note: I'm currently using cash basis accounting. Just recently I've started using QuickBooks Online to keep track of my profit and loss as well as pay my employees. The problem I'm facing is that even though my business is cash basis, when I run payroll, the software accounts for the wages and liabilities automatically. For example: If I was to run payroll near the end of the month, QuickBooks would show that I've spent **[X amount of money + payroll expenses]** for that month. Where as my actual bank balance will show only the amount of payroll expenses that have actually been withdrawn from the account. Which in most case will be different because not all employees will cash their cheques before the beginning of the next month.* Up until now I've only ever had one business chequing account for all my transactions. Is this normal? OR Should I open another separate account with the bank using it solely for payroll expenses? For example: Every time I run payroll using QuickBooks I would simply transfer the amount of payroll expenses into the newly made account (from which all employee pay cheques would be withdrawn). This way my chequing and QuickBooks account balances would match.* Thanks in advance for any help.