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O
Okoolat
October 23, 2019
Question

Early Payment Discount & Sales Tax

  • October 23, 2019
  • 1 reply
  • 0 views

In an invoice when a customer pays early, the discount percentage can be entered from the drop-down menu at the bottom of the invoice. But QuickBooks Online applies the sales tax to the discounted amount -- not non-discounted amount, as it were. If I am not mistaken CRA rules dictate that sales tax must be applied to full amount -- not discounted amount. Only way I can correct this is by manually entering the sales tax amount myself. Is there another way? Thx

 

 

1 reply

J
JamesM
October 23, 2019

Hi there,

 

It's good to hear from you again. I'll be happy to steer you in the right direction with this issue.

 

Based on your description, the other workaround I recommend is manually calculating the discount and adding it as a line item on your invoice. If you give set discounts for set amounts, you can create a new product item that you can add to the invoices. Here's how you can do that:

 

STEP 1

  1.     Select Settings ⚙and then Products and Services.
  2.     Select New to create a new item.
  3.     Select Non-inventory or Service for the type.
  4.     Name the item Discount. If you want to create multiple discount items, give them unique names so they're easy to tell apart.
  5.     In the Sales price/rate field, enter the discount as a negative amount. Keep in mind, this is a dollar amount and not a percentage.
  6.     From the Income account drop-down menu, select the Discount given account. QuickBooks creates this account for you when you turn on the discount feature.
  7.     From the Sales tax category drop-down menu, select Nontaxable.
  8.     When you’re done, select Save and close.                

Here's an image for visual reference:

 

STEP 2: Add the discount to an invoice or sales receipt

 

  1.     Select Create (+) and select Invoice or Sales receipt.
  2.     Add products and services. Then fill out the rest of the form.
  3.     Add the Discount item you just created. You can adjust the discount if you need to, just make sure it's a negative amount.
  4.     When you’re ready, select Save and send or Save and new.                  

Give these steps a try and let me know how you make out. I'll be here in case you have other questions. 









 

 

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