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We use the POS system Big Harry Dog. These transactions are transferred daily. They pull through as undeposited funds. I am told that quickbooks uses Prism to calculate sales tax on these through journal entries. If we were to pull an undeposited fund through and zero it out due to a deposit being forced and manually entered, would this "automatic" journal entry process still calculate sales tax on the zeroed out undeposited funds ?
Hi, Justjackie.
I'm here to share more information on how QuickBooks calculates sales tax, and I'll share how to fix the issue. Just a heads up, I still recommend reaching out to your accountant so they can guide you accordingly.
By default, sales tax is not automatically calculated if it's a journal entry. Since your POS system transfers the entries as undeposited funds, you'll have to make a deposit and assign it to the correct account.
Before doing so, you'll have to set up a sales tax item and then calculate the sales tax manually. Then, enter it as a different line item on the Make Deposits window. Here's how to create a deposit:
Moreover, I've added these articles as your guide to managing sales tax:
Keep me posted whenever you have concerns about recording taxes.
"If we were to pull an undeposited fund through and zero it out due to a deposit being forced and manually entered, would this "automatic" journal entry process still calculate sales tax on the zeroed out undeposited funds ?"
Does BHD create a daily journal entry in QB or a sales receipt or ??? You should be able to reassign Undeposited Funds without affecting sales tax because sales tax is based on your sales, not your deposit. Are you trying to reassign Undeposited Funds to your bank account? If so, you can create a deposit (Bank > Make Deposits) and the Undeposited Funds will show up there and can be deposited into your bank account. Or, if BHD is creating a journal entry, and you want to change the journal entry, you can change Undeposited Funds to your bank account and it should not impact your sales tax entry.
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