Sales Tax upon receipt of payment
How do I get QB online to charge sales tax upon receipt of payment not on date of invoice?
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cmWxDIufKr4yUOacwZ5xHE
02/05/12 4:36pm PST
Viewed by asker 04/10/12 1:50pm PDT
Viewed by asker 04/10/12 1:50pm PDT
2 Replies
02/07/12 2:51pm PST
Dana0323,
The only way to not record the sales tax on an invoice at the time of creation is to track your books on a Cash Basis rather than on Accrual.
Accounting methods
Cash basis and accrual basis are accounting methods that determine when and how you report income and expenses for tax purposes.
The IRS wants you to use the same method each year when reporting income. You should talk to your accountant about which is most appropriate for your business.
What is cash basis?
When you use cash basis as the accounting method, income is reported when you receive payments, instead of when you invoice a client. Expenses are reported when you pay bills. If you use invoices and receive bills to pay later this report method will affect the amount reflected in your A/R and A/P accounts. For more information see KB 1359.
What is accrual basis?
With accrual basis as the accounting method, income is reported as soon as you invoice a client (instead of when you receive the money) and expenses are reported when you receive a bill.
Accrual basis is more accurate than cash basis reporting. It also may let you manage your business better by showing you trends in income and expenses well in advance of the actual payments you make or receive.
To Change the Accounting Method:
- Go to the Company tab and click Preferences.
- On the left side of the screen, click Reports.
- Choose the accounting method to which you'd like your reports to default, and then click Save.
Note: You can also keep your overall accounting method for reporting unchanged, but experiment with changing the accounting method only on an individual report here and there to see the difference that change makes in your reporting.
To change the accounting method on a report:
- Click the Reports tab to open the Report List page and select the report you'd like to view.
- At the top right, click the Customize button.
- In the new window that opens, go to the General section and then note the Accounting Method selected.
- You can click to select a new accounting method.
- Make any other necessary customizations and click Run Report.
02/08/12 12:55pm PST
Latest post
Thank you. So what typically happens with my business is that we receive a reservation then create an invoice and charge the guest a downpayment. We then charge the balance due(final payment and the tax) seven days prior to their move in date. I do not charge the sales tax until the final payment is due....however QuickBooks wants the tax charged with the deposit not with the final payment. I don't do this in case of cancellation ---as I do not want to have to deal with a credit from the tax agencies when refunding the initial deposit. Is there any way to correct this with service dates, payment due dates or some other method?
Thank you for your help. Dana
