Advance Deposits and Sales Tax Liability

When my company accepts an deposit to purchase materials for a job, QB Help says that the proper way to do this is to create a Sales Receipt for the amount, with an Item such as "Upfront Deposit" Then, when creating the invoice, enter the Upfront Deposit item with a -1 Quantity and its amount, and it appears as a credit of sorts on the invoice. This works well for everything but calculating the Sales Tax Liability Report. The only way I know to accept a flat deposit (say $1000.00 even) is to make the item Non-Taxable. When I create the report for Sales Tax Liability, this shows up as a negative number in Non-Taxable Sales. Guess what? A negative NON Taxable sale is positive sales tax due! If it is a non-profit organization who gives us a $20,000 down payment, QB shows I owe sales tax on the $20,000. What am I doing wrong? If I make the upfront deposit item taxable, QB wants to throw the sales tax percentage on top of the actual deposit amount, making the final number higher, which won't work either.

Reply to
mickamg
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I can't get my QB to accept a negative quanitity sold. However I can skip the quanitity sold [leave blank] and enter a negative dollar amount.

As to taxes, if the tax item is set correctly everything seems to work out fine. Of course my sales tax agency insists that they get their share of the money even if I don't have it yet from the customer.

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Golden California Girls

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scoy1

Reply to
Mickamg

If you apply the payment to the invoice, the payment will show at the bottom of the invoice and the total due will be less.

If you anticipate this situation as happening often, you can do what I do -- create an item in the item list with boilerplate text stating something like this: "A payment has been received and applied to this invoice. Pay date xx/xx/xxxx, Check # xxx, Amount $$$$$$." When you issue the invoice, use the item and fill in the blanks. Do NOT put the amount of the payment IN the item line -- QB will deduct the amount when you apply the payment to the invoice in the 'Receive Payments' window (AFTER you created the invoice and BEFORE you print a copy to the customer).

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L

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