Every financial professional wants to perform at optimal effectiveness and efficiency. QuickBooks Enterprise delivers to this end, featuring a variety of tools the user can leverage to customize the software to their specific needs. If the option you are looking for is not available, there are hundreds of approved add-on packages by third party software vendors that may fill in the gaps. Let the user beware, however; with flexibility comes the responsibility to learn the nuances behind the flexibility. Learning the intricacies of how the program retrieves data to QuickBooks Enterprise reports will assist you in ensuring that the information displayed is really the information needed. In this article, I present a few examples in which an investment in time spent learning will yield immediate returns. “Can you rely on the default QuickBooks Enterprise sales tax liability report for use in reporting sales tax to the state? ” The sales tax liability report is a great tool in arriving at your taxable sales and gross sales figures, while the underlying detail report is good for reviewing reasons for non-taxable sales. The default report will include transactions posted to QuickBooks Enterprise using all items on sales transactions during the selected date range. Sales transactions included in QuickBooks Enterprise are invoices, sales receipts, and credit memos and statement charges.
So what can go wrong? (QuickBooks Premier and Pro users take note here as well – the following issues and suggested resolutions also apply to you!)
- An item was included in a sales transaction that was not a sale. Customer deposits / retainer is a good example. This item generally points to a liability account until applied to a customer invoice. Because it is an item used on an invoice to request payment from the customer, the default sales tax liability report will include this item in the total sales for the period. Technically, this is not a sale and should not be included in total sales reported to the state.
- Income(an Invoice or Sales Receipt) was received, but a sales transaction was not entered. Instead,you posted the income using a “Make Deposit” form. This sale will be excluded from the default sales tax liability report; therefore, your total sales on this report will not be correct.
- A sales discount was deducted by your customer. Sales discounts deducted by your customers on their remittance advice are easily entered on the receive payment window in QuickBooks, ultimately reducing total sales on the profit and loss report. This type of transaction does not include an item, so it will not reduce total sales on the sales tax liability report.
- A sale was improperly categorized. An item is included in a sale transaction that is incorrectly pointing to a Cost of goods sold or an income account.
Here are some easy steps to take to make sure the reports you create can be relied upon to remit the correct payment and sales figures to the state.
- Filter the sales tax liability report for ordinary income accounts, and memorize this report. Use this report instead of the default report.
- Use a sales receipt to post payments received for income that has not been previously reported in QuickBooks on an invoice. Include the sales receipt on the deposit transaction.
- Do one of the following: Manually adjust the monthly sales tax liability report for these amounts. or Enter a credit memo to “house” customer name using an item pointing to the sales discounts chart of account for the total discounts taken for the month. Then, make a journal entry debiting accounts receivable and credit customer discounts for the same amount. Bes sure to add “house” customer name in the Customer:job column of the journal entry. Return to the receive payment window; then select “house” customer and set the credit memo against the journal entry.
- Review your items list and make sure items that appear in both sales and purchase transactions are two sided