Companies set up to use the cash basis accounting will not be able to switch to the Automated Sales Tax.
The only way to switch a cash basis company is to set the company's accounting method to accrual. You can then activate Automated Sales Tax, and then revert back to cash basis accounting.
How does this affect the Sales Tax Center, reporting, and more?
- If you set your accounting method to Cash AFTER setting up the Sales Tax Center, QuickBooks will still automatically calculate your sales tax but your Sales Tax Center will still display based on accrual method. As a workaround, you can use Sales Tax Liability reports to determine the proper Sales Tax payments recorded in QuickBooks Online.
- If you set your accounting method to Cash BEFORE setting up your Sales Tax Center, you will be defaulted to manual sales tax and unable to activate the AST feature. In this case, you may want to start a new QBO account/company file then set up the Sales Tax Center prior to setting your accounting method.