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How to manage the import custom duty on QBO?

we are importing products from foreign country. Currently I manage import custom duty on spreadsheet. How to manage the import custom duty on QBO?

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Best answer 10-15-2018

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Established Community Backer ***

If your products are being stocked as inventory, then you...

If your products are being stocked as inventory, then you need to use a work around.

All costs to get an item on hand and get it ready for sale are part of the item cost, assuming you have entered a bill for the items

create an expense account called custom duty and pay the customs invoice using that expense account as the expense for the payment

bring up the bill for this shipment,

1. note the amount of the bill, then portion out the customs duty amount across all items, by adding that portion to each items total amount
2. move up to the expense/account section of the bill and select the custom duty expense account, enter the full amount of the bill as a negative amount. 

When you click out of that field, check the bill amount, it must match the amount you noted at the start.  If so save teh bill, and click through any warnings you get about payments being applied.

QB will re-calculate the per item cost, and if some have been sold, make necessary adjusting entries

View solution in original post

14 Comments
Established Community Backer ***

If your products are being stocked as inventory, then you...

If your products are being stocked as inventory, then you need to use a work around.

All costs to get an item on hand and get it ready for sale are part of the item cost, assuming you have entered a bill for the items

create an expense account called custom duty and pay the customs invoice using that expense account as the expense for the payment

bring up the bill for this shipment,

1. note the amount of the bill, then portion out the customs duty amount across all items, by adding that portion to each items total amount
2. move up to the expense/account section of the bill and select the custom duty expense account, enter the full amount of the bill as a negative amount. 

When you click out of that field, check the bill amount, it must match the amount you noted at the start.  If so save teh bill, and click through any warnings you get about payments being applied.

QB will re-calculate the per item cost, and if some have been sold, make necessary adjusting entries

View solution in original post

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Insane that QBI doesn't have an easier method for this. N...

Insane that QBI doesn't have an easier method for this. Not so practical for a bill that has hundreds of line items
Established Community Backer ***

True, it is that way in desktop too, has been for years a...

True, it is that way in desktop too, has been for years and years
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@Rustler - Tips & Tutorials How do I get this to not show...

@Rustler - Tips & Tutorials How do I get this to not show on my PL until the goods are received and or sold? I have inventory on 1 order sent in 2 separate shipments. 1 air (faster) 1 sea (slower and cheaper). @qbteachmt
Established Community Backer ***

instead of an expense account, use a current asset accoun...

instead of an expense account, use a current asset account if you wish

I have not see an instance where I had to pay for international shipping or customs before I received the inventory, but that doesn't mean it can't happen
Established Community Backer ***

"create an expense account called custom duty and pay the...

"create an expense account called custom duty and pay the customs invoice using that expense account as the expense for the payment"

When you do this type of Holding account activity, that should not hit the P&L. It is an Asset account. Keep in mind there might be a delay for the date of the activities. You don't want this expense to ever be Reported, so that "carrying" account is on the Balance Sheet, for this reason. This is Work In Process or Invested Costs from multiple sources.


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I see no point in rehashing this subject, we have disagre...

I see no point in rehashing this subject, we have disagreed on this before.
Established Community Backer ***

Talk to your CPA about "holding" account processes. Think...

Talk to your CPA about "holding" account processes. Think through the impact of holding an Expense across a month end or year end, and you will understand why WIP is Balance Sheet activity. We agree on this for Production and Construction, and this is the exact same condition. Where we disagree is typically how and why to use Items, not how to do proper accounting for Processes.
Established Community Backer ***

Sigh >>>Expense across a month end or year end <<< - not...

Sigh
>>>Expense across a month end or year end <<< - not happening, not part of the situation
The payment is posting, and clearing simultaneously, there is no work in progress, there is no holding period
I really wish you would stop adding aspects to the issue that do not apply to the situation.

We do not agree that this is the exact same condition as wip for construction, in fact when I answer about construction, or accumulating costs of an inventory item to get it ready for sale, I DO use a wip asset account for that, since it applies

in this situation it makes no difference, nothing is being held over - and I have asked both cpa's and tax cpa's, 4 of them actually.
Established Community Backer ***

"I have not see an instance where I had to pay for intern...

"I have not see an instance where I had to pay for international shipping or customs before I received the inventory, but that doesn't mean it can't happen"

I do this for clients; we prepay Brokers and Duties and even for Pallets, and that is Other Asset.

I explain this in this very topic. Review with your own CPA how this needs to be tracked for your reporting.


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Re: If your products are being stocked as inventory, then you...

Hi,

 

I am facing the same issue. Can you please help me out? Kindly give step by step instructions.

 

thanks

Noel

Anonymous
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Re: Sigh >>>Expense across a month end or year end <<< - not...

Thanks for joining in the thread, @Noel123.

 

I can help show you how to create an account for custom duty mentioned by @Rustler. However, I'd suggest consulting the advice or your accountant in choosing the account that's best for your business.

 

Here's how to create a custom duty account:

 

  1. Go to Accounting tab and select Chart of Accounts.
  2. Click the New tab.
  3. Make sure to consult your accountant on what Account Type to use.
  4. Name this account as Custom Duty then click Save and Close once done.

 

Then let's follow the rest of the steps of the workaround given by @Rustler.

 

As always you can contact our Online Care Support if you need assistance in going through the steps. They can pull up your account and do a screen sharing to help you with the navigation in QuickBooks.

 

Please feel free to post if you need anything else. Have a good one.

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Re: How to manage the import custom duty on QBO?

Hi,

 

I buy products from UK to be shipped in Singapore.

 

For each product, there is different duty based on the type.

 

Product A EUR 4 with Duty SGD 5.  Good Services Tax of 7% applied to EUR 4 and SGD 5

Product B EUR 5 with Duty SGD 6. Good Services Tax of 7% applied to EUR 5 and SGD 6

 

I provide Purchase Orders to UK in EUR.

 

There is also shipment cost.

 

How to I account for the actual COGS in my inventory list including Shipment Cost, Duty and GST?

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Re: If your products are being stocked as inventory, then you...

you are requested to you kindly share the screen sort of the customs duty entry I try but didn't do exactly.

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