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.

Understanding QuickBooks Inventory (Stock) Module

To use QuickBooks inventory module, first, you need to turn on the inventory module. To turn on the inventory module, you go to Edit menu, select Preferences. From the Preferences Window, click on the Item and Inventory icon on the left side of the Window to get into the Item & Inventory preferences. Next, go to Company Preferences tab; check the check box for Inventory and Purchase Orders are Active field. Click the ‘OK’ button to save your setting.

When you add an inventory item into your item list, there are three accounts you need to associate this item with, they are COGS account (Cost of Goods Sold), Income account and Asset account (Inventory).

When you purchase an inventory item from your supplier, example: ten units of Item 123 at $100.00 each, the double entry for this item will be:

    Debit: Asset account (Balance Sheet account) at $1,000.00

    Credit: Accounts Payable (Balance Sheet account) at $1,000.00

At this stage, the transaction is only between Balance Sheet accounts (Inventory Asset account and Accounts Payable account). Therefore, you will not able to see this transaction as a ‘Purchase’ (Cost of Goods Sold account) in the Profit and Loss report.

When will it affecting the Cost of Goods Sold account?

When creating an invoice for the Item 123 (example: you sell five units at $150.00 each), the double entry for this invoice will be:

    Debit: Accounts Receivable (Balance Sheet account): $750.00

    Credit: Sales account (Profit and Loss account): $750.00

    Debit: Cost of Goods Sold account (Profit and Loss account): $500.00

    Credit: Inventory Asset account (Balance Sheet account): $500.00

Join my QuickBooks training class to have a better understanding of using QuickBooks inventory module.

Why was Freight Charges included in the Sales report?

When you invoice your customer Freight Charges, you should create it as an Income type of account; it will show in your Sales by Customer report as an item sold to the customer.

Although, some user may create Freight Charges as an expense account (usually for reimbursement of expenses incurred), it will still show in your Sales by Customer report.

Example: you invoice your customer Product A for S$1,000.00 with a Freight Charge of $100.00. The double entry for this case will be:

    Debiting Accounts Receivable account: $1,100.00

    Crediting Sales Income account: $1,000.00

    Crediting Freight Charge Expense (In this case, create as an expense account type):  $100.00

In order to add Freight Charge into Invoice, you have to create Freight Charge as either an Other Charge item or Service item. Hence, it will show in the Sales by Customer report. This is because the Default Filter for Sales by Customer is ‘All Sales Item’.

If you do not want to show the Freight Charges item in your Sales by Customer report, you can filter your report, you can set the Filter for Account to ‘All Ordinary Income accounts’. Refresh your report; you should see the Freight Charges excluded from your Sales by Customer report.

Can you give me the Sales by Rep report for this quarter?

    “Jane, can you give me the Sales by Rep report for this quarter?”

    “Sure. But Boss, can you give me few days to prepare?”

    “Why you need few days? I need it later for the Sales Meeting.”

    “Sorry, I can’t. I need to sort them out and prepare it in a Spreadsheet.”

    

Do you have the similar problem?

QuickBooks can help.

You can add your employees, the salesperson, as a Rep. Then, in every invoice; you select the Rep for the case into the Rep field. Next, from either ‘Sales by Rep Detail’ or ‘Sales by Rep Summary’ report, you can view the sales generated by individual salesperson (Rep).

Besides, you can set the default Rep for each customer in the Customer Profile page. When creating invoice for the customer, the Rep for this customer will automatically pulled out into the invoice. This method will reduce the mistake of selecting wrong Rep for the invoice.