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Best answer December 17, 2020
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Hi again sh2295,
I can see you're still hard at work with getting familiar with QuickBooks Online, which is awesome. I love that you're diving right in to make sure that you're able to record your transactions as you need to for your books. Once again, I'm here to help.
Once you've turned on sales tax in QuickBooks Online and set up the sales tax codes you need, it's easy to add them to your transactions using the Sales Tax column. For more unique situations, it may take a little extra work, but it could still be possible to record the transactions in the software. Knowing a bit more about your transaction and its breakdown would be helpful for determining how you might go about recording it in QuickBooks Online. I'll highlight some details about recording basic transactions with shipping and sales tax.
To start, you mention shipping, which is a feature that can be turned on in your QuickBooks Online account settings following these steps.
- Select the Gear icon.
- Choose Account and settings.
- Click the Sales tab.
- Click the Sales form content section to edit.
- Toggle the option for Shipping (Note: If you hover over the (?) icon beside it, it tells you this: "Adds shipping fields (date, tracking number, destination, subtotal) to sales forms. Related setting: Advanced > Chart of accounts > Shipping account").
- Click Save, then Done.
The great thing about this feature is that it not only adds the field to enter the shipping amount, but it also allows you to assign a sales tax code specifically to the shipping charge. Here's an example of what that looks like on a customer invoice.
As you can see, I've got a sales tax code assigned to the main charge to the customer, and then I've also got one assigned to the shipping expense itself. I happened to use the same code, but you can use different sales tax codes as needed.
I see you've mentioned a code that reads GST/HAT. I'm thinking that may be a typo, however, if HAT is a specific custom code, that's something you can set up in the program as well. I've got an article here that can help you with setting up provincial, custom, and grouped sales tax codes in the program: How to set up a new sales tax code. Once a code is set up, it'll appear in the Sales Tax drop-down menus for you to assign to transactions and charges.
I'll leave you with that for now, but you're welcome to ask more questions about this. I'll make sure you have the information you're looking for.
For your reference, here are a couple of good resources for when you're just getting started with QuickBooks Online.
Take care!
Hi again sh2295,
I can see you're still hard at work with getting familiar with QuickBooks Online, which is awesome. I love that you're diving right in to make sure that you're able to record your transactions as you need to for your books. Once again, I'm here to help.
Once you've turned on sales tax in QuickBooks Online and set up the sales tax codes you need, it's easy to add them to your transactions using the Sales Tax column. For more unique situations, it may take a little extra work, but it could still be possible to record the transactions in the software. Knowing a bit more about your transaction and its breakdown would be helpful for determining how you might go about recording it in QuickBooks Online. I'll highlight some details about recording basic transactions with shipping and sales tax.
To start, you mention shipping, which is a feature that can be turned on in your QuickBooks Online account settings following these steps.
- Select the Gear icon.
- Choose Account and settings.
- Click the Sales tab.
- Click the Sales form content section to edit.
- Toggle the option for Shipping (Note: If you hover over the (?) icon beside it, it tells you this: "Adds shipping fields (date, tracking number, destination, subtotal) to sales forms. Related setting: Advanced > Chart of accounts > Shipping account").
- Click Save, then Done.
The great thing about this feature is that it not only adds the field to enter the shipping amount, but it also allows you to assign a sales tax code specifically to the shipping charge. Here's an example of what that looks like on a customer invoice.
As you can see, I've got a sales tax code assigned to the main charge to the customer, and then I've also got one assigned to the shipping expense itself. I happened to use the same code, but you can use different sales tax codes as needed.
I see you've mentioned a code that reads GST/HAT. I'm thinking that may be a typo, however, if HAT is a specific custom code, that's something you can set up in the program as well. I've got an article here that can help you with setting up provincial, custom, and grouped sales tax codes in the program: How to set up a new sales tax code. Once a code is set up, it'll appear in the Sales Tax drop-down menus for you to assign to transactions and charges.
I'll leave you with that for now, but you're welcome to ask more questions about this. I'll make sure you have the information you're looking for.
For your reference, here are a couple of good resources for when you're just getting started with QuickBooks Online.
Take care!
Got it. Sales tax only transactions are typically for imported goods or other border-related circumstances, and QuickBooks Online does have a method you can use to record it. Since you also need to include shipping on your expense, the usual steps will need some adjustments, but I can walk you through it.
In QuickBooks Online, the program won't allow you to select the sales tax payable account directly. Instead, it takes a bit of a workaround to account for. Here are the steps.
- Select +New from the left menu.
- Choose Expenses.
- Under the Category column, choose an expense account related to imported goods (or whatever the transaction relates).
- Under the Amount column, enter 0.01.
- Assign the sales tax code you need to that amount.
- On the next line, choose that same expense account again under the Category column.
- Enter -0.01 into the Amount column.
- Choose the Out of scope sales tax code for this line (Note: This ensures you'll be able to edit the sales tax amount in the steps to come).
- One a third line, choose the expense account for shipping charges under Category.
- Enter the Amount and Sales Tax codes as normal.
- Find the sales tax calculations under the Subtotal of the transaction.
- If the sales tax codes are the same on the transaction, make note of the sales tax calculated for the shipping costs, then manually add the amount of the sales tax only charge to that field.
- Click Save and close.
Here's an image demonstrating what I just described. In my example, I have a sales tax only charge of $50 and then a shipping charge with sales tax of $50. The $0.01 and $ -0.01 cancel each other out to be $0, and sales tax isn't calculated on only $0.01, so what I'm left with in the total is a $50 transaction with $6.50 in sales tax. Since I have the additional $50 in just sales tax, I added it to the sales tax field in the Subtotal to increase the overall Total.
By doing this, I've accounted for all the sales tax as well as the shipping costs. You can give it a try to see if this works for you. If you're curious to see it, this is the original article that goes over a sales tax only transaction: How to record a sales tax expense on imported goods
I recommend checking in with an accountant to make sure what I've added with the shipping expense on this kind of transaction works for you. I know I've shared the steps with you before, but to make sure you have them, check out the My Accountant tab in QuickBooks Online to find the email invite field or the Find a pro to help button so you can connect with someone who can share accounting expertise.
Don't hesitate if you have more questions!
