So when I go to the store to buy $100 of materials for a job, that amount comes out of my account and shows up as an expense. Now, I go bill out the customer for a job that cost me $200 in labor and that original $100 for materials. When that money comes back into my account, $300 is showing up as income. How do I differentiate/separate those amounts on my quick books account to show that I only made $200 (taxable amount) and not $300 which I already paid tax on that $100 in materials in the first place? Thanks in advance.
When you record a business expense, QuickBooks tries to assign it to the correct category. You can review the transactions created, so you can separate those amounts in QuickBooks. Just click on the drop-down arrow on the Date option on the Transactions page and enter thedate of the transaction. Don't forget to hit on the Apply button after entering the date range.
Also, I'd recommend consulting an accountant for the assistance advice needed in case you need to choose another category. Your accountant can provide more expert advice in dealing with this concern. If you haven't yet, I've got you here a link to use so you can find a bookkeeper near you: Business is better with a ProAdvisor.