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I
irene-mplatt-tz-
March 2, 2024
Question

How do you keep track of VAT on purchases and expenses

  • March 2, 2024
  • 1 reply
  • 0 views
We just converted from QBD where the VAT control Account kept track of both VAT charged/collected on sales and VAT paid on expenses and purchases; and then enabled us to file nett VAT payable or credit monthly.

However QBO seems to have two separate accounts for this. How do we set up and track VAT paid on Purchases/expenses in QBO and do monthly reconciliation of Sales VAT and VAT on expenses/purchases?

1 reply

J
JanbonN
March 2, 2024

Welcome to the Community space, Irene. I'm here to help you with setting up your VAT for your purchases/expenses and reconciling your VAT in QuickBooks Online (QBO).

 

QBO allows you to track VAT collected on sales and purchases by having two different accounts. Here are the steps to set up your VAT:

 

  1. Go to Taxes and click Set up tax.
  2. Fill in the necessary details and click Next.
  3. Follow the on-screen steps.
  4. Select Ok after finishing the setup.

 

Once you set up the VAT, you'll see the Tax Centre and a Tax/GST column on your sales and purchases forms. 

 

To reconcile your monthly sales VAT and VAT on expenses/purchases, you can use the Tax Centre. You can calculate the payments and returns from the VAT collected on purchases, and use the tax liability reports to monitor the purchase and sales transactions with VAT. Then, perform the reconciliation as you would normally do. 

 

Additionally, you can refer to this article to learn how to record, adjust, and delete sales tax payments in the tax center: Manage sales tax payments in QuickBooks Online.

 

Let us know if you need further assistance in setting up your VAT in QBO. We'll be here to help you in any way we can.

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