Recording billable items (not expenses) and PST

Jen45 · ‎September 02, 2021

When I purchase items (in my Products and Services list - NOT expenses) and mark them as billable, the taxes are not coming through correctly.

I am a construction company that is NOT registered to charge PST (in BC).

I enter the bill from the supplier using the Items section of the bill not the Category section.

I select the tax code GST/PST, check the Billable box, and select the appropriate customer/job.

When I go to invoice the customer the billable expense shows on the right, as it should.

However, when I add the item to the invoice, when I change the tax code to GST only (because I cannot charge my customer PST, I am not registered), the amount of the billable expense changes and no longer includes the PST that I paid on it.

The only way around this flaw, that I can see, is to enter the billable expense using the amount INCLUDING PST (that I have to calculate), use the tax code GST, and the overwrite the GST amount to match the bill.

The taxes all work beautifully when the billable expense is recorded in the Category section of the bill/expense, but not when it is entered in the Item section of the bill/expense.

Am I missing something, or is this a serious QuickBooks flaw (that also seems to exist in Desktop)?

Alex M · ‎September 02, 2021

Hi there,

It's vital for companies to charge the correct tax to their customers in order for their sales to be correctly accounted for in their books. QuickBooks Online is a great tool that's able to help you save time by allowing you to mark expenses billable so that you can automatically have it created to invoices for your clients. I can provide some information about billable expenses.

When it comes to marking a line of an expense as billable, whether it be using the Category or Item section, that line is linked to the line that appears on your sale. It's transferred as is, with the same tax code associated with both the expense and the sale. Since both the line of the expense and sale are linked, if you modify the tax code on the sale, it makes the same change to the expense.

I see that you've found a way around this by using just the GST tax code. Another way around having these transaction lines linked would be to just create the expense and sale separately, as you'll be able to add different amounts and tax codes to the sale.

If you have any other questions, feel free to reach out here.

BKPG2022 · ‎March 31, 2022

Hello,

I just read your reply for Quickbooks Online non how to deal with the separation of GST & PST when entering a billable expense.

I perform the same procedure as JEN45 BUT that is not a solution.

Explain to me again how an expense should be entered in QBO so that the expense + PST flows through to the invoice correctly without the GST .

Having to calculate the expense + PST then modifying the GST amount in the GST field is tedious & time consuming, not to mention too many variables for error both in entering the expense & creating the invoice.

@Alex M wrote:
Hi there,

It's vital for companies to charge the correct tax to their customers in order for their sales to be correctly accounted for in their books. QuickBooks Online is a great tool that's able to help you save time by allowing you to mark expenses billable so that you can automatically have it created to invoices for your clients. I can provide some information about billable expenses.

When it comes to marking a line of an expense as billable, whether it be using the Category or Item section, that line is linked to the line that appears on your sale. It's transferred as is, with the same tax code associated with both the expense and the sale. Since both the line of the expense and sale are linked, if you modify the tax code on the sale, it makes the same change to the expense.

I see that you've found a way around this by using just the GST tax code. Another way around having these transaction lines linked would be to just create the expense and sale separately, as you'll be able to add different amounts and tax codes to the sale.

If you have any other questions, feel free to reach out here.

bluelotuslyen · ‎May 15, 2024

I so appreciate the detailed explanation of Jen45. It is correct. I have the same issue as her when trying to bill out expenses. The given explanation by Quickbooks is NOT enough and rather like a BOT said it not a real human. I am hoping Quickbooks steps up and actually gives us better help.

Itbs

When you roll the PST into the subtotal on the billable expense, then adjust the GSR, you get a problem when creating the invoice. The invoice takes the subtotals of all expense subtotals and added 5,% GST. So that step you took to adjust the GST doesn't carry forward to billing the customer and you'll overcharge them. Is there a fix for this?

JanbonN

This feature is working as designed, ltbs. However, you can submit feedback to our product engineers for analysis. I'll also provide a workaround that may help.

Here's how to submit your request:

Go to the Gear icon and select Feedback.
Type in your request to add the delete/inactive option.
Once done, click Next.

As a workaround, you can configure the tax codes into separate line items, which will be carried over when creating billable expenses. For further guidance and to ensure it fits your business structure, please consult your accountant for accuracy. Another one is to create a custom tax rate.

Additionally, you can send statements to show customers summaries of their invoices, payments, credits, and balances.

Please let us know if you have other questions about your taxes in QBO, ltbs. We're here to help you in any way we can.

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Recording billable items (not expenses) and PST