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Best answer September 10, 2020
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Hello Benny,
Thanks for sharing the steps you're taking to add a discount to your purchase order and why you're looking to do so. The method you've mentioned here of creating an item and entering it as a negative line item is definitely a good workaround since adding a discount to a vendor transaction isn't available in QuickBooks Online. I can see how this would throw off your totals though, and I can help with this.
You're right, QuickBooks Online calculates sales tax on a line-by-line basis. When you're manually entering a discount line, I usually recommend putting a zero percent sales tax code, such as Out of Scope, for situations where sales tax calculates on the total before the discount. Since you want yours to calculate on the total after the discount, you can consider putting the appropriate sales tax rate on the discount line as well. Here are a couple of screenshots so you can see the difference. I've used an inventory item in my example, but the principle is still the same.
Discount calculation with zero percent tax
Discount calculation with sales tax
As you can see, in using the second method, the sales tax is calculates correctly as if it were only $45 on the transaction: $45 x 0.13 = $5.85
If you're not sure if that's the right method for you, I recommend touching base with the CRA or an accountant. An accountant that knows QuickBooks Online would be a particularly good person to have on your side here, and you can find someone to work with using the Find a pro to help button through the My Accountant tab in the program's left menu. You can also invite someone you're already working with as a user to you account in that tab, which gives them the access and tools to help you with your books.
Feel free to share your thoughts and feedback using the method outlined here: How do I submit feedback? Our goal is to equip QuickBooks Online with the features bookkeepers and business owners are looking for, and the feedback helps the product development team accomplish that.
Wishing you the best!
Hello Benny,
Thanks for sharing the steps you're taking to add a discount to your purchase order and why you're looking to do so. The method you've mentioned here of creating an item and entering it as a negative line item is definitely a good workaround since adding a discount to a vendor transaction isn't available in QuickBooks Online. I can see how this would throw off your totals though, and I can help with this.
You're right, QuickBooks Online calculates sales tax on a line-by-line basis. When you're manually entering a discount line, I usually recommend putting a zero percent sales tax code, such as Out of Scope, for situations where sales tax calculates on the total before the discount. Since you want yours to calculate on the total after the discount, you can consider putting the appropriate sales tax rate on the discount line as well. Here are a couple of screenshots so you can see the difference. I've used an inventory item in my example, but the principle is still the same.
Discount calculation with zero percent tax
Discount calculation with sales tax
As you can see, in using the second method, the sales tax is calculates correctly as if it were only $45 on the transaction: $45 x 0.13 = $5.85
If you're not sure if that's the right method for you, I recommend touching base with the CRA or an accountant. An accountant that knows QuickBooks Online would be a particularly good person to have on your side here, and you can find someone to work with using the Find a pro to help button through the My Accountant tab in the program's left menu. You can also invite someone you're already working with as a user to you account in that tab, which gives them the access and tools to help you with your books.
Feel free to share your thoughts and feedback using the method outlined here: How do I submit feedback? Our goal is to equip QuickBooks Online with the features bookkeepers and business owners are looking for, and the feedback helps the product development team accomplish that.
Wishing you the best!
