How do you enter gross receivables (HST Included) and have QBO calculate the sales amount (net of HST) and corresponding HST?

Hi Ernesto

When you enter a line item/expense/bill in QBO you'll be asked to assign a tax code for that item: GST, 0-rated, exempt, etc.

Just above that column, you should see a drop down to select whether the value being entered is tax exclusive (gross) or including tax (net).  QBO will then calculate and record taxes appropriately based upon your selection.

Hope this helps!

I am entering receivables (gross) via a journal entry. Can you expand your explanation using a journal entry?

Hi Ernesto

Generally, you want to avoid using Journal Entries in QBO, but use the built-in functionality instead.  For receivables, I'd recommend going on your menu to Invoicing-> Invoices-> Create New Invoice; or New+ -> Customers -> Invoice. 

From there you can select your line items and use the tax code and including/excluding as described.

Hope this helps!

We do not use the invoicing feature in QBO; hence the reason to go the journal entry route. Is there a way of doing it? Yes, I can calculate the net amount of sales and then apply the HST to calculate the gross, etc. but then it defeats the purpose.

Hi Ernesto

Whether you issue invoices from QBO or not, I would still recommend against using Journal Entries in favour of the dedicated system functionality so that if you need to issue deposit invoices, record a payment from a customer, assign a credit note, etc it's all done in a way that QBO is created to function with.

If you insist on using Journal Entries, then it would be a matter of entering it gross:

DB expense

DB GST payable liability (entering the ITC code)

CR balancing entry