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How Do I Collect and Track Sales Tax?

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The first step to collect and track sales tax in QuickBooks is to enable the preference to do so.

On the Edit->Preferences menu, select the Company Preferences tab on the Sales Tax submenu.

Click Yes on the Do you charge sales tax? preference.

QuickBooks Enterprise Solutions 10 Preferences Sales Tax

Once the preference is set, you use:

  • sales tax codes to specify whether a customer or item is or is not taxable
  • sales tax items to specify the sales tax applicable to a customer or invoice
  • sales tax groups to combine multiple sales tax items into a combined rate for a customer or invoice

To collect and track sales tax, you’ll need to create at least 1 sales tax item, which you can do directly from the Preferences window.

QuickBooks Premier 2009 Preferences Sales Tax Items

If you are changing your sales tax preference after you’ve already created customers, inventory, or non-inventory parts, you’ll be given the opportunity to change the tax status of those existing customers and items.  When the Updating Sales Tax window appears, choose what you’d like to update and click Ok.

QuickBooks Premier 2009 Updating Sales Tax

This update process will update all customers and all items that are either an inventory part or non-inventory part, so make your decision to update carefully.  Decide based on the characteristics for the bulk of your customers or inventory items, because the exceptions will have to be reviewed and changed individually.

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How Does Quickbooks Apply a Customer Payment To an Invoice With Multiple Line Items?

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QuickBooks applies a customer payment to an invoice with multiple line items by applying the proportion of the pre-tax subtotal paid to each individual line item and applying the remainder to sales tax on the invoice.

If an invoice is paid in full, this obviously results in every individual line item and the applicable sales tax marked as paid in full.

If the invoice is only partially paid, individual line items on the invoice will be partially paid in the proportion that the total payment bears to the pre-tax subtotal.

Let’s review an example using the sample data for Castle Rock Construction from QuickBooks 2009.

As of 12/4/2012, customer Teschner (an example name only) has 2 invoices outstanding: invoice # 1064 dated 10/5/2012 for $760 (the balance remaining) and invoice # 1085 dated 11/28/2012 for $8305.95.  On 12/5/2012, Teschner makes a payment of $5000 on check # 56321.  A portion of this payment, $760, is applied to the older invoice, # 1064, paying that invoice in full.  That leaves $4240 (i. e., $5000 – $760) to partially pay invoice # 1085.

Invoice # 1085 contains 8 line items with a pre-tax subtotal of $7920 and sales tax of $385.95, for a total of $8305.95.  To determine how QuickBooks applies the partial payment of $4240 to the line items on this invoice, compute the proportion of the payment to be applied ($4240) to the pre-tax subtotal ($7920), or 0.510477429 ($4240/$7920).

Next, multiply this ratio by the pre-tax subtotal of each line item on the invoice.  The first line item has a subtotal of $600.  Therefore, the amount paid on this line item is $306.28, or 0.510477429 X $600.  If we continue this process for each line item on the invoice and sum the amounts paid, that total will be $4042.98.  Since we started with a total of $4240 to apply to this invoice, the remainder of $197.02 (or $4240 – $4042.98) is applied to sales tax.

By creating a cash basis Custom Transaction Detail Report, we can see exactly how QuickBooks applied the payment to an invoice.  We’ll use the date parameters and the Filters on the Modify Report… button to highlight the exact application of the original payment of $5000.  Remember, a portion of this amount, $760, was applied to an older invoice.  This appears as the second line on the report.  The amounts in the debit column correspond to the exact application of the check.  For invoice # 1085, the invoice with multiple line items that was partially paid with this check, the amounts in the debit column represent the payment applied to each line item on the invoice.

QuickBooks Custom Transaction Detail Report Apply Customer Payment
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Do Deposits Appear In a Center, Such As the Customer Center?

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Deposits don’t appear in a Center, such as the Customer Center under normal circumstances.

The 3 Centers (Customer, Vendor, and Employee) only include transactions where the transaction source matches the Name shown in the Center.  For a Deposit, a customer is not considered the transaction source.  Instead, it’s the target.

Sources and targets are an important concept in QuickBooks.  For more information, see our article on sources and targets.

If you record a Deposit via the Make Deposits window, the source is the bank account.  Even if you enter a Name in the Received From field, that Name is associated only with targets, not the source.  There’s no way to assign a source Name in the Make Deposits window.

However, if you open the Register for the bank account to which the funds were deposited, you can edit the Name assigned to a Deposit.  Under normal circumstances, a Deposit could be made up of funds from multiple Names, so QuickBooks doesn’t assign a Name to the Deposit.

The first 2 entries on the screenshot below are typical deposits where no Name was assigned.  The third entry is a Deposit made via the Make Deposits window but where we’ve edited the Name in the bank account register to include a Customer:Job name.  This edited Deposit does appear in the Customer Center for that Customer:Job, as shown below.

While it’s technically possible to make a Deposit appear in a Center, we don’t recommend it.  A Deposit made up of funds from multiple Names can never be made to appear in a Center for more than 1 Name, since only 1 Name can be assigned to the source.  That makes expecting Deposits in a Center very unreliable – something that is never a good idea for an accounting system.

QuickBooks Enterprise Solutions 10 Deposit In Center
QuickBooks Enterprise Solutions 10 Deposit In Center 2
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How Do I Resort Lists?

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Lists are one of the foundations of QuickBooks, and from time to time they can become out of order.  That’s when they need to be resorted.  Some common indicators that it’s time to resort your lists include:

  • the list itself is out of order
  • an element is missing
  • new entries in a list appear at the top of the list instead of in their sorted order
  • you can’t turn on the account number preference
  • selecting a Customer:Job, Vendor, or Employee in a Center fails to display existing transactions for that name
  • Names don’t properly auto-fill when entering a Name filter on the Advanced tab of the Edit->Find… function

Resorting any list will undo any special order you’ve applied to the list, and this activity can’t be done in multi-user mode.  It’s always a good idea to backup your company file before undertaking an action that can’t be undone.

There are 8 lists that can be resorted. They are:

  1. Customers:Jobs
  2. Vendors
  3. Employees
  4. Other Names
  5. Accounts
  6. Items
  7. Memorized Reports
  8. Memorized Transactions

Since this technique is often used to address possible data corruption, we’ll outline the most efficient technique to resort multiple lists, but you can also choose to resort an individual list by opening up a Center and right clicking on a list element.

The first 4 lists are collectively referred to as Names or Entities, and there’s an easy way to resort these 4 lists:

  1. Open the Write Checks window by clicking on Banking->Write Checks or using the keyboard shortcut Ctrl + W
  2. In the Pay to the Order of field, click Ctrl + L
  3. Opt to include inactive list entries by clicking the Include Inactive checkbox
  4. Click the Name button and choose Re-sort List from the menu
  5. Click Ok to resort the lists
  6. Uncheck the Include Inactive checkbox

The screenshot below shows the combined Name list in Step 4:

QuickBooks Enterprise Solutions 10 Resort Name List

Our related article explains how to provide easy access to this combined list of all Names.

Resorting the Chart of Accounts and Items lists follow similar procedures, except each of these lists will have to be resorted individually.  To access the Chart of Accounts, click the Lists->Chart of Accounts menu selection or use the keyboard shortcut Ctrl + A.  To access the Items list, click Lists->Items.  Opt to include inactive list entries, resort the list from the button in the lower left of the window, and uncheck the Include Inactive checkbox before proceeding to the next list.

Resorting Memorized Reports and Memorized Transactions are similar to the above steps, except there’s no need to include inactive list entries since they’re not allowed on these lists.  To access Memorized Reports, click the Reports->Memorized Reports->Memorized Report List menu selection; to access Memorized Transactions, click Lists->Memorized Transactions or use the keyboard shortcut Ctrl + T.

After resorting lists, close and reopen your company file (.qbw) to insure that all changes are successfully written to disk.

Resorting lists is discussed in this Intuit knowledge base article.

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Why Does the To Be Printed Field Remain Checked After Printing an Invoice?

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According to Intuit, this is possibly caused by a damaged invoice template.

The recommended solution is to duplicate the damaged invoice template, make it inactive, and use the duplicated template in the future.

Here are the steps to resolve this problem:

  1. Identify the invoice template used on the invoice whose To be printed flag didn’t properly reset after printing
  2. Open the Templates window by clicking on the Lists->Templates menu selection
  3. Select the damaged invoice template and click the Templates button at the bottom left corner of the Templates window
  4. Click Duplicate to make a copy of the damaged invoice template
  5. Optionally rename the copy to a new unique name by right clicking on the template, choosing Edit Template on the context menu, and clicking the Manage Templates… button
  6. Right click on the damaged invoice template and choose Make Template Inactive from the context menu
  7. Return to the invoice whose To be printed flag didn’t properly reset after printing
  8. Change the Template in the upper right corner to the new copy of the damaged template
  9. Print the invoice and confirm the To be printed flag reset properly

The screenshot below highlights the To be printed flag and the Template on the QuickBooks Create Invoices window:

QuickBooks Enterprise Solutions 10 Invoice Show Template

See our related article on clearing the To be printed flag under normal circumstances.

This problem is also discussed in an Intuit knowledge base article.

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