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Invoice

I invoiced my customer for a 2% back usage tax and I showed the tax as a product/service and now it is showing as part of my monthly sales. How can I change this?  Also, I set up an account named Tax Audit Payable, type: Other current liabilities. How can i show their payment to this account and not my business checking?

Best answer 05-23-2019

Accepted Solutions
QuickBooks Team

Re: Invoice

@randylykins

 

I see, thank you. As I suspected, these reports will list all sales transactions, meaning any Invoice or Sales Receipt will be included. Only in income-based reports, such as the Profit or Loss report, will this transaction be excluded (since the item's Income account was replaced with a Liability). If your business relies on the reports that you've listed, the only alternative is to create customized versions of them that filter out your Tax Product/Service item. Here's how you can achieve that:

 

Filtering Reports to Exclude a Product/Service

  1. From QuickBooks Online, navigate to and open the report you'd like to filter.
  2. Click the Customize button in the top-right. Open the Filter ▼ menu.
  3. Check the Product/Service box, open the drop-down ▼ next to it, check the (Select All) box, and then scroll down and un-check the Tax Product/Service item that you used.
  4. Click Run report. If you'd like to save this customized version to use in the future, select Save customization in the top-right. Now this version that excludes the tax item will be instantly available from the Reports tab.

We also offer a detailed guide on customizing reports for your benefit. In the video I'm including below, I run the Sales by Customer Summary report, which only displays an Invoice ($12,345) containing my Design item. The Design product/service has an Other Current Liability set as the Income account to ensure it mirrors your situation exactly when I Customize the report:

 

Using these instructions, you can continue running the Sales by Customer Summary Report and the Sales Tax Report without it counting the invoice created for your 2% back usage tax. Please let me know if there's anything else I can do to help you succeed with QuickBooks, I want to make sure you're taken care of. Thanks again, wishing you a safe and productive rest of your week.

Frequent Contributor *

Re: Invoice

Thank you so much!! Your help with this matter is greatly appreciated.

8 Comments
QuickBooks Team

Re: Invoice

Hello @randylykins,


Thanks for posting here at Community!

 

The transaction was included in your monthly sales report since you used an income account on your product/service item. We can correct this by changing the income account to other current liabilities.

 

 Let me show you how:

  1. From the left panel, click Sales.
  2. Select Products and Services.
  3. Look for the service item, then click Edit.
  4. Click Income account drop-down arrow, and select Other Current Liabilities account.
  5. Select Save and Close.

 

Once done, you can manually delete and re-create your customer's invoice with the correct service item account.

 

Feel free to click this article: How to Void or Delete an Invoice or Other transactions.

 

If there's anything else I can help you wit, feel free to drop your questions and concerns in Community. Have a bless day!

Frequent Contributor *

Re: Invoice

I have tried following your instructions but in quickbooks online I do not see an income account drop-down arrow, that allows me to select Other Current Liabilities Account.

QuickBooks Team

Re: Invoice

Good day, @randylykins.

 

To clarify, are any of your Liability accounts displaying on the Income ▼ drop-down of your Service item's Edit menu? Please note that you may have to scroll up on the menu, as it will automatically open to the middle of the list (where the Income accounts are). I've created a brief video demonstration below in which I select an Other Liability Account using Grace's instructions above:

 

 

If your QuickBooks isn't working like the video above, please be sure to leave a comment below with the details of the difference so I can help you get this resolved. Thanks again for reaching out, I look forward to hearing from you soon.

Frequent Contributor *

Re: Invoice

I was able to find the Income tab and change to other current liabilities, but for some reason it is still showing up in my total sales. I do not know what else to do. I have deleted the invoices and enter them again and still have the same issues.

QuickBooks Team

Re: Invoice

Hello, @randylykins.

 

Thank you for the update. Can you clarify which report or list you're seeing this Invoice appear as Total Sales? It's possible that you're referencing a report which only lists sales transactions, meaning it will include any Invoice regardless of which Product/Service is used on it. This would be inevitable based on your choice of an Invoice transaction to record the 2% back usage tax.

 

I'll be on standby for your response, I'm determined to help you find a solution to this issue. Thanks again for reaching out, best wishes.

Frequent Contributor *

Re: Invoice

The invoice is appearing as Total Sales on the Sales by Customer Summary Report and the Gross Sales on my Sales Tax Report

QuickBooks Team

Re: Invoice

@randylykins

 

I see, thank you. As I suspected, these reports will list all sales transactions, meaning any Invoice or Sales Receipt will be included. Only in income-based reports, such as the Profit or Loss report, will this transaction be excluded (since the item's Income account was replaced with a Liability). If your business relies on the reports that you've listed, the only alternative is to create customized versions of them that filter out your Tax Product/Service item. Here's how you can achieve that:

 

Filtering Reports to Exclude a Product/Service

  1. From QuickBooks Online, navigate to and open the report you'd like to filter.
  2. Click the Customize button in the top-right. Open the Filter ▼ menu.
  3. Check the Product/Service box, open the drop-down ▼ next to it, check the (Select All) box, and then scroll down and un-check the Tax Product/Service item that you used.
  4. Click Run report. If you'd like to save this customized version to use in the future, select Save customization in the top-right. Now this version that excludes the tax item will be instantly available from the Reports tab.

We also offer a detailed guide on customizing reports for your benefit. In the video I'm including below, I run the Sales by Customer Summary report, which only displays an Invoice ($12,345) containing my Design item. The Design product/service has an Other Current Liability set as the Income account to ensure it mirrors your situation exactly when I Customize the report:

 

Using these instructions, you can continue running the Sales by Customer Summary Report and the Sales Tax Report without it counting the invoice created for your 2% back usage tax. Please let me know if there's anything else I can do to help you succeed with QuickBooks, I want to make sure you're taken care of. Thanks again, wishing you a safe and productive rest of your week.

Frequent Contributor *

Re: Invoice

Thank you so much!! Your help with this matter is greatly appreciated.