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Level 1

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?

Solved
Best answer October 15, 2018

Best Answers
Highlighted
Level 15

How to manage the import custom duty on QBO?

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

20 Comments
Highlighted
Level 15

How to manage the import custom duty on QBO?

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

Highlighted
Level 1

How to manage the import custom duty on QBO?

Insane that QBI doesn't have an easier method for this. Not so practical for a bill that has hundreds of line items
Highlighted
Level 15

How to manage the import custom duty on QBO?

True, it is that way in desktop too, has been for years and years
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Level 2

How to manage the import custom duty on QBO?

@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
Highlighted
Level 15

How to manage the import custom duty on QBO?

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
Highlighted
Level 15

How to manage the import custom duty on QBO?

"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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Level 15

How to manage the import custom duty on QBO?

I see no point in rehashing this subject, we have disagreed on this before.
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Level 15

How to manage the import custom duty on QBO?

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.
Highlighted
Level 15

How to manage the import custom duty on QBO?

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.
Highlighted
Level 15

How to manage the import custom duty on QBO?

"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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Level 1

How to manage the import custom duty on QBO?

Hi,

 

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

 

thanks

Noel

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Anonymous
Not applicable

How to manage the import custom duty on QBO?

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.

Highlighted
Level 1

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?

Highlighted
Level 1

How to manage the import custom duty on QBO?

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

Highlighted
Level 1

How to manage the import custom duty on QBO?

Thanks for this tip.

 

So I have inventory shipped from the UK to Canada.

I'm able to follow your steps to account for all the expenses in GBP.  But the import taxes are in CAD, and the bill only seems to allow a single currency (unless I'm wrong).

 

What's the most efficient way to handle multiple currencies in the same bill?

Highlighted
QuickBooks Team

How to manage the import custom duty on QBO?

Hello Marc-d. 

 

Thanks for posting on this thread, 

 

The bill will show total amounts in CAD and in GBP.

The inventory/product and service will show in CAD if the supplier is set up in CAD. 

Highlighted
Level 1

How to manage the import custom duty on QBO?

Well, i"m trying to figure out how to track inventory and COGS and the COGS of an item includes the cost of the goods in GBP and customs taxes and brokerage fees in CAD.  

Highlighted
QuickBooks Team

How to manage the import custom duty on QBO?

Thanks for the prompt reply and for sharing additional details, @Marc-d.

 

To track your inventory COGS in GBP and your brokerage fees in CAD, you’ll want to use a CAD vendor so the COGS will be in CAD.

 

This will also show in the report the total converted amount from CAD to GBP. Also, the cost in CAD will be converted to GBP once invoiced or checked in the report.

 

To know what kind of report to use as a reference, I’d recommend getting in touch with your accountant as they can provide expert advice about this.

 

Additionally, to learn some tips and managing your inventory, check this article for reference: Set up and track your inventory in QuickBooks Online. This provides complete information on tracking your inventory effectively.

 

You can always tag me if there’s anything else you need help with tracking your inventory in QuickBooks Online (QBO). I’ll be around to assist you. Keep safe.

Highlighted
Level 1

How to manage the import custom duty on QBO?

Not Solution. It does't work.

Highlighted
Level 14

How to manage the import custom duty on QBO?

@universal_ndt 

You may need an inventory management app to record the landed cost.

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