How to account for 3 different Freight & Shipping in QuickBooks 2014 desktop?

Good afternoon, ChrisSinFL.

Thank you for reaching out to the Community for help on this. I'd like to give some insight to your questions about recording freight charges in QuickBooks. Freight charges can be added when receiving a bill, and when invoicing a customer. These charges will post to the account you chose when setting up a "shipping/freight" line item. I'll show you how to create this:

• In QuickBooks, go to Lists and then click Item List.
• At the bottom left, click Item, and then select New (Ctrl+N).
• In the Type box, choose Other Charge.
• Add a name for the item (i.e. "Shipping" or "Freight").
• In the Account field, select an account to use. This will be the account used to record these transactions.
  Note: Customers most commonly use a separate COGS account for shipping/freight. These line items will not impact the COGS accounts for the inventory items. Be sure to verify this information with your accountant, so you both are on the same page.
• Add in any additional information you'd like, and click OK.

Now you will be able to add this to bills and invoices. You will add it to an invoice like any other line item, and you'll do the same on bills. If you have any questions about these steps, leave me a comment below.

when i enter a sales receipt for a customer and i have charged shipping, it subtracts from my cogs Freight account, reducing my cogs.  is this correct??

Hi there, sainicharlie.

Let's try the account that's assigned to the shipping service item to make sure it's not deducting to your freight account. Here's how:

1. Go to the Lists menu and select Item List. 
2. Look for the shipping item and double-click on it.
3. Proceed to the Expense and Income account fields and make sure the assigned accounts are correct. You may need to change them if the accounts are incorrect. I'd also recommend reaching out to your account just in case you're not sure which accounts to use.
4. Click OK.

Once done, open your freight account report again to check if the shipping charges are no longer deducting from your COGS. 

Let me know if you have follow-up questions. We're always here to help. 

In simply terms please and thank you: Is  buyer paid shipping not deductible? Or how about free shipping? The IRS considers shipping things out as income right, or as part of the item gross sale. This means they will tax you on the item price + the shipping total amount. So how do you deduct or prevent this because I am not making a profit on the shipping?

Thanks for joining the thread, Entrepreneurdude.

Let me provide some clarification on your concern about shipping.

If you receive free shipping from the supplier that's the time you have income. As suggested by Rustler above, you can create an income account. Make a billable expense to offset the cost if the customer pays for the shipment. I'll show you how.

1. Create an expense account for the shipping.
2. Go to the Vendors menu, then Enter Bills.
3. Choose a vendor from the Vendor dropdown list.
4. Enter the necessary information.
5. Select the Expense tab, in the Account column, locate the expense account you created.
6. Enter the amount and memo if applicable.
7. In the Customer Job column, choose the customer who paid the shipping and checkmark the Billable column.
8. Once done, hit Save & Close.

After that, you can create an invoice and then add the billable expense you created.

1. Go to the Customers menu, then Create Invoices.
2. Select the name of the customer, a billable expense window will popup. Select OK.
3. Click the Expenses tab, then checkmark the billable expense.
4. Hit OK to add it to the invoice.
5. You can add all the items your customer purchase.
6. Once done, select Save & Close.

Also. I've added this article to learn how to personalize your invoices and get the information you need: Use and Customize form templates.

I'll be around to help if you have more QuickBooks questions. Have a good one.