It's nice to see your post here, BIFFUD.
Adding another calculation to pay for corporate taxes can be done by creating a separate item. By doing so, make sure to categorize the item as an expense.
Here's how to create an item:
Once done, you can add the item when creating a transaction using the project feature.
You might want to visit this article for more insights in using the Project feature in QBO: Set up and use the Projects feature.
Be sure to get back to me if you have other questions. I'm always delighted to help you out. Have a nice day!
Oh interesting thank you; setting a service to an expense account is a trick I would not have thought of!
It looks like this would become a line item on the invoice itself; is there any way to do this in a way that our customers will not see when we send the invoice?
Thanks for getting back to us, @BIFFUD.
The steps provided by my colleague will help add the corporate tax as a line item. The ability to hide it when sending the invoice is currently unavailable. You may consider calculating the tax amount and manually add it as a workaround.
I can see how having this option would be helpful for you and your business. Rest assured that I'll pass along your suggestion to our Product Developers. They're always looking for ideas to consider on how to improve QuickBooks Online (QBO).
In the meantime, I recommend visiting our Blog site. This is where we share recent happenings and future developments, such as updates to newly added features.
Just in case, I'll add these articles for future reference:
I want to make sure everything is taken care of for you, so let me know if you have any other issues or concerns. I'm more than willing to assist. Have a good one!
Got it, thanks! Right now we do manually add these kinds of "internal" expenses as journal entries when invoices are paid (e.g. we manually attribute a debit from our cash account to the project and transfer it to a "tax withoholding" account). However, that journal entry does not register as a cost -- this is another feature that I think would be very helpful: to allow journal entries to impact income and cost for a given project.
Right now I think our best bet would be to treat these costs as an internal "bills" from our company, so when we invoice the client we also bill the project for the corporate tax (as well as an overhead percentage of gross which is part of our internal processes).
I'll have to figure out good a way to mark the bills as resolved once the internal transfers occur...
Hi there, @BIFFUD.
You'll want to add the name of the project in the cost line when creating a Journal Entry (JE). That way, it'll be added to the project's profitability report.
However, if you're referring to affect the product/service item cost, using JE is impossible. I suggest getting in touch with your accountant if you want more tips on how to better record this.
You might also want to check this great resource for reference in case you'll need to track your inventory in QuickBooks Online (QBO).
Let me know in the comment section below if you have other questions. I'd be happy to help. Take care!
Interesting, I had found that Journal Entries that appear in the transactions list, did not actually impact the Income and Costs (or profit margin).
Notice how the "TEST" JE is not reflected in income or costs / profit margin.
This is probably because the account that the $500 debit was associated with is a cash account, not an expense account. The overhead expense is not realized by the company at the point of that transfer, so it is indeed still cash from our corporate perspective even though it is also a *cost* from the project perspective -- the project has $500 less profit to work with.
Does this make sense? I appreciate if I will need to speak with my accountant to identify a solution at this point, but I also don't fully understand the use case for rendering the $500 transaction in the transaction report if it isn't going to impact the costs and income of a project.
Shouldn't cash account transactions that have been tagged to a project impact those numbers?