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Level 1

Should Purchase Orders in QB include tax and shipping

I fill out purchase orders in QB2014 when I make purchases online. This includes all the information for the order including shipping and tax calculations. When the vendor ships separately items from the same PO, I receive separate invoices, the total amounts of which are difficult to reconcile with my original purchase order in QB because those POs include tax and shipping for all items. This makes it much more difficult & time consuming to enter and pay bills, since I then have to parse out the actual tax and shipping for the items received, not the items originally ordered. Is it better to just not include tax and shipping when filling out a PO in QB, then add those values when I receive invoices?

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Best answer 12-10-2018

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Level 15

a PO is non posting so how you do it on there is up to yo...

a PO is non posting so how you do it on there is up to you it is just a memo of what has been ordered, the bill is what matters, and usually if the bill entered does not match the PO being used, QB will ask if you want the PO changed

yes you have to portion out the shipping/taxes et al, across all the items received  on the bill

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Highlighted
Level 15

a PO is non posting so how you do it on there is up to yo...

a PO is non posting so how you do it on there is up to you it is just a memo of what has been ordered, the bill is what matters, and usually if the bill entered does not match the PO being used, QB will ask if you want the PO changed

yes you have to portion out the shipping/taxes et al, across all the items received  on the bill

View solution in original post

Level 2

Re: a PO is non posting so how you do it on there is up to yo...

Related question - what if the Vendor requires Sales Tax to be shown on the PO?  Why won't this be added when the PO is created?

Moderator

Re: a PO is non posting so how you do it on there is up to yo...

Hello there, @Kim Perico.

 

QuickBooks is not designed to track sales tax automatically on non-sales transactions. If you need to enter sales tax on the purchase order, you need to manually calculate and enter it in the AMOUNT column. 

 

There are two ways to do this. First is track sales tax on purchases as an expense (not to be paid later). Here's how:

 

1. Create an Expense account (if you haven't yet).

  • Go to the Company menu at the top and pick Chart of Accounts on the drop-down.
  • In the Chart of Accounts window, right-click anywhere and click New.
  • Choose Expense on the Choose Account Type, then Continue.
  • Enter the necessary information, then Save & Close.

2. Once done, go to the Vendors menu at the top and pick Create Purchase Orders on the drop-down.

3. In the ITEM column, click the blank field, then select the drop-down.

4. Choose  Add New.

5. Under TYPE, click the drop-down then select  Other Charge

6. Fill in the item fields.

7. Click OK.

8. Enter the amount of sales tax in the Amount column (this will need to be calculated manually), then select Save & Close.

 

The other option is to track it on purchases as a liability (to be paid later).

 

Here's how:

 

1. Create an Other Liability Account if you haven't yet as well. You can use the same steps above from step 1 - 3. Just make sure to choose Other Account Types and Other Current Liability in the Choose Account Type window.

2. When it is time to pay this sales tax, you can see the liability that has been accrued by looking at the Chart of Accounts. This amount can be paid with a regular check.

 

For more details, I recommend checking the following article:

Let me know if you have any other questions by leaving a comment below. I'm still here to help you some more. Have a wonderful day ahead.

Level 1

Re: a PO is non posting so how you do it on there is up to yo...

@MaryGraceS , could you take your "purchase as an expense" option a step further, and create an Other Charge line item, give it a description such as Sales Tax, assign it to your Sales Tax Expense account, and use said line item on a PO to enter sales tax in?

Moderator

Re: a PO is non posting so how you do it on there is up to yo...

Hi there, @danielcmendoza.

 

I appreciate you for sharing additional steps to the solution I posted above. I already updated my answer. 

 

Thank you for visiting the Community. Please know that I'm just a post away if you should have any questions. Have a great rest of your week.

Level 1

Re: a PO is non posting so how you do it on there is up to yo...

Thanks @MaryGraceS for considering this additional step.

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