It is always preferable if you add your VAT code on the invoice. QuickBooks helps you in adding that VAT code. But want to know how to set up VAT number in QuickBooks?
This article will take you through the steps on how to set it up. Since QuickBooks is one of the most effective accounting software in the market, it is useful to get everything in place with it so that when the time comes calculating tax and invoicing will be easier.
How to Set up VAT Number in QuickBooks?
👉 Open QuickBooks company page
👉 Go to the top Menu bar and click on Edit.
👉 From the drop-down menu click on Preferences
👉 It will open a page, scroll down to Sales Tax on the left column with items.
👉 Click on the Sales Tax.
👉 A new tab will open with My Preferences and Company Preferences.
👉 Click on Company Preferences
👉 Check that the box with yes is selected beside ‘Do you charge sales tax?’
👉 Ensure that under the box ‘Your most common sales tax item’ you keep it as Out of Sales.
👉 Next, make sure that the box beside ‘As of invoice date (accrual basis)’ is selected instead of ‘Upon recent payment (cash basis)’.
👉 Nex t go to ‘WHEN DO YOU PAY SALES TAX’ click on either ‘Monthly, Quarterly or Annually’.
👉 Next, go to the tab ‘Add sales tax item’.
👉 This will open a new page with New Item.
👉 Under the ‘Sales Tax Name’ box write VAT.
👉 Next, under Description write VAT Tax.
👉 Under the Tax Rate (%) enter the rate.
👉 Under Tax Agency (the vendor that you collect from) write the name of the Agency.
👉 If the Vendor is not found a message box will appear, click on Quick Add.
👉 Then click on OK on all the windows that are open.
👉 Next, go to Create Invoices and click on it.
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👉 A new page will open. On the Customer Job: put the name for who you are creating the Invoice for.
👉 In case the customer is not found a message box will open stating that. Click on Add new.
👉 Next, go to the Quantity column, key-in the number.
👉 Next click on the Item Code drop-down icon.
👉 Click on the Service. A new pop-up will appear with Sales Tax Code, stating the QuickBooks automatically assigns the sales codes…’
👉 Click on OK.
👉 You will see that the figures have been automatically entered under Price Each and Amount.
👉 Also in Tax, the VAT is showing with the percentage that you entered.
👉 Besides that, it has also calculated the VAT based on the Amount and at the end of the Invoice, it is showing the total amount, i.e. the amount for the service with the VAT.
👉 After creating the Invoice close the window.
👉 Next go to the Menu bar again on the top and click on Vendors.
👉 From the drop-down menu select Sales Tax. Select that a new list will appear.
👉 From there select Sales Tax Liability.
👉 This will open a new window with VAT Company Sales Tax Liability. Since this the first time you are doing it, the window will show Zero under all the categories.
👉 To update the sales tax go to the menu and click on Last Month.
👉 From the drop-down list scroll up and click on All.
👉 You will see the Sales Tax Liability has automatically been updated as per the Invoice that you have created.
👉 Close the window, a new pop-will appear with the message ‘Memorize Report’. Click on No.
👉 It will take you back to the QuickBooks company file.
👉 Next click on the List and from there click on Chart of Accounts.
👉 Next click on Accounts and from there click on New.
👉 A new window will open, click on the icon beside Bank and then click on Continue.
👉 This will open another window.
👉 On the Account Name box, click on VAT for Vendors
👉 Write a description regarding the account on the box beside Description.
👉 Then click on Save & Close.
👉 A new pop-up will appear with the message Set Up Bank Feed.
👉 Click on No.
Following these steps will help you set up VAT number in QuickBooks. But, you may face some issues while setting up VAT in QuickBooks and the procedure may also go bit detailed. To know complete detail to set up VAT number in QuickBooks or fix the issues while setting up VAT, our QuickBooks POS Expert team/ or connect with us via Live Chat Solution. Our Team will assist you in solving the issue or guidelines of following the process.
