Hey wkveld,
One of the best features available in QuickBooks Online is the Sales Tax Centre. It uses some advanced tracking to make filing your sales tax easy, and helps you save time so you can focus on running your business. The most powerful elements of this feature are Exception and Open Transaction tracking, which automatically represent changes to a previously filed period to ensure every transaction is file once. It's great that you've noticed this column, and I'll be happy to show you how it works.
Before getting into the Open Transactions column, I'd like to quickly go over how different accounting methods work with sales tax. There are two methods available in QuickBooks Online.
- Cash basis tracks and reports sales tax based on the payment date.
- Accrual basis tracks and reports sales tax based on the invoice date, even if the invoice is unpaid.
Since an invoice and its payment can fall in different filing period, this can lead to significant differences in tax returns with different accounting methods. If the method is changed after already filing another return, there's a possibility of some transactions not being reported, and others to be reported twice. Thankfully, QuickBooks Online automatically detects those transactions and represents them accordingly in the Open Transactions column. To learn more about how this affects sales tax, and to see an example of this, check out this awesome article: How Cash and Accrual accounting affect sales tax
I'm here for you, so feel free to ask me any other questions.
