QuickBooks Asia

Setting up selling price for items to be inclusive of GST

Software: QuickBooks Canadian version

QuickBooks does allow user to set their selling price to be inclusive of the GST. If occasionally you need to include your selling price with GST, during the preparation of Invoice, you can simply select the checkbox “Amounts include tax” in your Invoice window.

However, if permanently you need your selling price to include GST, then, you have to set it up in both your preferences and item profile.

In your Sales Tax preferences window, under Company Preferences, you can set “Allow tax inclusive (gross) prices and costs to be entered”. Next at the item profile, you can set your prices to include Taxes by selecting the checkbox for “Amts Inc Tax”.

Now, whenever you sell this item, the price shown in the invoice window will be inclusive of GST.

Tax account does not exist

Some user who uses QuickBooks Asia version 2007/08 had this error ‘Tax account does not exist’. This error was caused by corruption in tax setting (G.S.T.). When you perform a Verify and Rebuild data, QuickBooks does not pick up this error; user has to manually edit the setting to correct this error.

Before you edit your QuickBooks setting, it is best to back up your QuickBooks data. 

Then, from the Edit menu | select Preferences function. In the Preferences Window, go to Tax Preferences; then, follow by Company Preferences tab. Next, check the ‘NO’ radio button selection for ‘Do you track tax?’. Save your setting and exit Preference setting.

Next, you go back to your Tax Preferences Window and select ‘YES’ radio button selection for ‘Do you track tax?’. This will re-active your QuickBooks tax account.

The above will resolve the error on ‘Tax account does not exist’; try it, if you have a similar problem.

 

 

Accrual vs. Cash Basis

In QuickBooks financial reporting, you are being giving two options; Accrual or Cash basis.

Which reporting basis should you choose?

Accrual basis reporting will present an income or expenses in Profit and Loss report at the moment when you record an income (invoice) or expenses (Bill). 

Cash basis reporting will present an income or expenses in Profit and Loss report only when payment received from the sale or payment made for an expense.

On 02 September 2010, you record an invoice for a sale amount of $1,000.00 in QuickBooks. You gave your customer 30 days payment term. Then, your customer made a payment to you on 20 September 2010. 

If your reporting basis is based on Accrual basis, then on 02 September 2010, your Profit and Loss Report will show an income of $1,000.00. However, if your reporting is based on Cash basis, then your Profit and Loss report on 02 September 2010 will show nothing.

If you are using Cash basis reporting, you will realized your income on 20 September 2010. That is, only when customer made payment to you. Although, in General Ledger, you can see the transaction in Sales account; QuickBooks ‘hide’ the Sale value from the Profit and Loss report.

User can go to the Reports & Graph Preferences to change the reporting basis from Accrual to Cash basis. User who uses Cash basis has to be extra careful if you are GST register trader. In the Tax Preferences you have an option to use Accrual basis or Cash basis for Tax reporting.

You should check with your Accountant on the type of reporting basis that you should be using.

You must assign an account for this transaction

Lately, I have a few customers having the same error with QuickBooks (Version 2004, 2005/06 and 2007/08). When they try to enter an invoice or bill, QuickBooks prompted an error message ‘You must assign an account for this transaction’.

I have checked both Chart of Accounts and Item list; it does not seem to have any issue. Besides, no error found when I run a Verify Data and Rebuild Data. It just not allows me to save the transaction. What could be the problem?

I did a test, I removed the ‘Require accounts’ setting from the Preferences. I did an Invoice again, since I removed the Require Accounts setting; it allows me to save the transaction. From the transaction journals, I found that the Tax Payable account was missing. Instead of crediting the Tax Payable account it crediting Uncategorised Income account. Ha! I found the problem.

It seems that the Tax Code, Tax Preference or Tax Payable account was having a problem; it may be corrupted and cause the selected Tax Code not able to register with the associated Tax Account. I turn off the Tax Preferences, save it. Then, I turn on the Tax Preferences back again to allow the setting to refresh. Next, I set the ‘Require Account’ back to its original setting.

I entered an invoice again, this time I can save the transaction without an error message prompted. I view the transaction journal, it presented nicely with debiting of Accounts Receivable account and crediting both Sales and Tax Payable account.