United States United Kingdom Australia Canada (English) Canada (French) France Singapore South Africa Global Ireland
cancel
Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for 
Search instead for 
Did you mean: 
Announcements
NEW Connect to DBS IDEAL direct bank feeds Click here
JuanJHAccountants
Level 1
posted
‎May 16, 2024 07:58 AM
last updated ‎May 16, 2024 7:58 AM

How to allocate an expense item that is on a sales invoice to Input VAT?

For example:

Client sells R300,000.00 worth of cattle. Then there is commission deducted from the Auctioneer of R30,000.00

Accounting wise I need to split this between income which is the R300,000.00 and Commission expense which is R30,000.00. Now what happens is I created a services item for the commission expense and it splits it perfectly between income and expense when I enter the commission amount with a negative value. But on the VAT report it is declaring the net amount of R270,000.00 so I am out with the R30,000, because it isn't splitting it on the VAT report between Input VAT and Output VAT

Reply
1 Comment 1
Ivan_G
QuickBooks Team
QuickBooks Team
‎May 16, 2024 09:49 AM

How to allocate an expense item that is on a sales invoice to Input VAT?

I can assist with your concern so that your VAT will be calculated accurately in QuickBooks, Juan.

 

The VAT calculation would depend on the tax code. If the commission service item you've entered (-30,000) is taxable, only the tax under the R270,000 amount will be visible on your tax reports.

 

Since you need to calculate your VAT for the whole R300,000 amount, we'll have to mark the -30,000 item as tax-exempt. This way, you'll have an accurate tax calculation. 

 

We can achieve this by following the steps below:

 

  1. Open your QuickBooks account and select your client's name to access their company file.
  2. Go to the Sales menu and select All sales.
  3. Look for the transaction you've created for the sale and commission. Then, click View/Edit.
  4. On the commission's item line (-30,000), select Exempt under the VAT dropdown.
  5. You'll then notice that on the VAT percentage, the overall total of R300,000 will be taxable.
  6. Once done, click Save.

 

After that, you can run your Tax reports and notice that you now have the accurate tax calculation for the R300,000 sale.

 

Additionally, there are several reports that you can maximize to track your sales and inventory status in QuickBooks. It lays down information about the items you buy and sell depending on what data you want to review.

 

Keep me posted by leaving a comment below should you have more questions about your VAT in QuickBooks. I'll make sure to provide prompt assistance.

Reply