19 Minutes To Master Sales Tax in QuickBooks Online [VIDEO]

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Video transcript

00:00 sales tax and QuickBooks Online how to
00:02 manage the quick answers our first to go
00:09 to taxes and then add or edit tax rates
00:13 and agencies or edit sales tax settings
00:15 where you can edit what you’ve already
00:18 entered and that’s like I said in taxes
00:21 and then the add edit tax rates and
00:25 agencies click new to add a new sales
00:28 tax rate or if you want to enter what
00:33 you’ve sorry edit which you’ve
00:35 previously entered click on edit sales
00:37 tax settings if you want a view
00:41 reporting on your sales tax liability
00:46 you go to taxes again view sales tax
00:48 liability report that is here here you
00:55 can specify the reporting period or put
00:59 in custom dates and you can select which
01:02 tax agency you want to see reporting on
01:05 just change those settings at run report
01:07 and finally any other sales tax setting
01:11 you might want to edit is the sales tax
01:15 category for products and services to do
01:17 that you go to sales products and
01:21 services and you get here you’ll see a
01:26 listing of your products and services
01:28 just click the one you want to edit
01:30 click Edit under the action column and
01:39 towards the bottom of the product
01:41 service information screen you should
01:45 see sales tax category okay so that’s
01:50 quick answers now we’ll get into a
01:52 little more detail about all that so
01:58 before I get into it I want to start off
02:02 with a caveat did recently QuickBooks
02:07 Online has made some changes to the user
02:11 experience and
02:13 I’m getting conflicting information
02:15 between what I see in the sample company
02:17 which is what I use for my examples
02:20 obviously I use that for purposes of
02:22 privacy so I’m seeing a difference
02:24 between that and what I’m seeing
02:28 elsewhere so what I chose to do in order
02:35 to get this video out not sit on it
02:38 forever is to basically cover both ways
02:41 so I guess whatever QuickBooks has got
02:46 going on in terms of that you new user
02:48 interface if it’s affecting you yet
02:52 then you should still be able to use
02:54 this video if it’s not you should also
02:56 still be able to use this video so with
02:58 all that said we’ll get into it here
03:03 capabilities of QuickBooks Online it’s
03:05 supposed to have a sales tax engine it
03:07 makes calculations that basically kind
03:09 of a wizard for figuring out sales tax
03:12 what it does do though once you enter
03:14 information automatically calculates
03:15 every time that you enter an invoice or
03:18 a sales receipt okay so it’s based on
03:21 the location of the sale and the type of
03:24 product and basically everything you
03:26 entered during setup there supposed to
03:29 be a sales tax enter where you can view
03:31 upcoming tax payments see liability
03:33 reports change settings and all that you
03:36 can as I covered in a quick answer still
03:38 do most of that but again
03:40 things have changed somewhat so I can’t
03:44 walk you through an example of the old
03:47 basic setup or any of the old examples
03:50 because again the sample company has
03:53 changed is different than they used to
03:56 be but here’s how the old way used to do
04:00 basic setup and you go to left menu
04:03 taxes and in setup sales tax there would
04:06 be a button there you would confirm your
04:08 address your place of business and it
04:12 would ask you if you needed to collect
04:14 sales tax outside of where your address
04:17 was and you’d click typically no they’re
04:25 in close the window then
04:27 he would also select a filing frequency
04:28 and you’d be giving guidance on that
04:30 based on your locality and the
04:35 anticipated amount of receipts you had
04:37 how often you should file unfortunately
04:40 seems for the time being all that’s gone
04:42 you’re now left to kind of sort it
04:47 figure it all out yourself I would
04:50 assume that’s a functionality that
04:52 they’ll bring back but yeah I don’t know
04:55 like I said things are a little weird
04:56 now as of the recording of this video so
05:00 the new way though you know that I’m
05:02 still go to taxes on the left menu then
05:04 like I said add edit tax rates and
05:06 agencies let that load up and your first
05:14 time you’re probably going to when
05:16 you’re setting it up you’re gonna want
05:17 to click new and you’re gonna choose
05:22 whether you do a single or combined tax
05:26 rate and if you’re not familiar a single
05:31 tax rates pretty straight forward that
05:34 would be like a state sales tax
05:35 now obviously sometimes counties and/or
05:40 cities or you know other other
05:46 governments will implement an additional
05:49 sales tax you know to pay for schools to
05:53 pay for new arenas to pay for whatever
05:57 it is so when they do that when you
06:00 start stacking sales tax rates that’s
06:03 when you’ve got a combined rate okay
06:06 what I would suggest doing until they
06:08 get to a little wizard back up and
06:10 running if they do is to go to this
06:14 address right here sales tax states calm
06:17 and that’s an easy way to look up what
06:21 the sales tax rate is in a specific area
06:23 but I would definitely double check that
06:25 against the appropriate State Department
06:29 of Revenue website just to confirm it
06:35 so once you have it entered if you want
06:39 to edit mention go to edit sales tax
06:46 settings here and this isn’t editing
06:50 being sales tax for one of the
06:54 government entities attended earlier
06:57 this is more general settings you know
07:00 as you can see do you charge sales tax
07:02 where your default sales tax is and
07:05 whether you want to make all new
07:08 customers taxable or and/or all new
07:11 products and services taxable so there’s
07:13 more general settings not the specific
07:16 settings those would be edited here of
07:18 course where you would click on the
07:21 relevant government entity and click
07:24 Edit there you can change the rate
07:37 oops what did you do there I don’t know
07:42 what happened get back on track here
07:59 a little bit more about those general
08:06 options that you can edit you know it
08:09 asked do you charge sales tax if you
08:13 sell physical goods typically the answer
08:15 is gonna be yes again the old with the
08:20 old way it used to walk you through
08:22 where you could kind of I don’t know it
08:28 gave me more guidance on what was
08:31 taxable and how much based off your
08:32 locality and everything it just doesn’t
08:34 seem to do that now but so typically the
08:37 answer is gonna be yes but it’s
08:39 complicated topic so make sure you do
08:40 your research you pick a default sales
08:44 tax that’s a drop-down like I showed you
08:47 from previously entered agencies and
08:49 then make all new customer product
08:52 services taxable depends on the nature
08:54 of your business
08:55 but I would imagine that would typically
08:56 be checked also okay so a little bit
09:02 more about tax categories for products
09:04 and services again that sales products
09:06 and services then you want to add it for
09:08 a specific product or service
09:27 so the sales tax category like I said
09:31 it’s a drop-down you can choose either
09:33 taxable standard rate non-taxable or
09:36 choose a special category if you’re
09:38 unsure you might take a look at special
09:40 categories to make sure this particular
09:43 product or service doesn’t fall under
09:45 one of those let’s take a look at that
09:48 here and this is what I was talking
09:55 about how it’ll kind of walk you through
09:57 a little bit as far as different
10:00 products and services are concerned so
10:02 if you were in the business of
10:05 professional services
10:06 you know you might click that look and
10:10 see it’ll narrow it down if your
10:13 services say photographer fall under
10:18 this category you know again you keep
10:22 narrowing it down and check the button
10:26 click the button and hit done and it’ll
10:31 apply the appropriate sales tax given
10:36 your locality like I said and a
10:40 particular product or service if you
10:45 can’t find that particular product or
10:49 service in that special category list
10:52 then just go ahead and click taxable
10:55 standard rate unless you’re certain it’s
10:58 non-taxable I used to be able to check
11:05 the sales tax calculation by looking at
11:10 sales receipt and invoices again as far
11:13 as I can tell that’s no longer an option
11:17 like if we go to all sales here sales
11:21 all sales select receipt or invoice
11:23 click on the sales tax link it used to
11:26 be where sales tax was calculated you
11:30 know it was clickable kind of hyperlink
11:33 in the bottom right and then you could
11:35 viewer edit the sales tax calculation
11:37 from
11:38 there now if we look at for instance an
11:55 open invoice that depends in part what’s
12:03 on the invoice course it’s all
12:06 non-taxable services then if something’s
12:12 not quite right
12:13 no kiddin I see we can click on another
12:17 one here I’m good
12:31 and this one doesn’t have sales tax that
12:37 was a payment though we tried one more
12:40 invoice yeah all right so anyhow like I
12:51 said it used to
12:53 obviously the functionalities gotten a
12:55 lot worse yeah that’s the way it used to
13:00 work it could be that they bring that
13:01 functionality back but the time being as
13:05 far as I can tell it’s gone the sales
13:09 tax enter the old way again and the left
13:12 menu you go to taxes and then sales tax
13:17 in some instances if you do payroll you
13:22 might see payroll taxes as a tab or a
13:30 sub option there but in this case the
13:34 sample companies and set up that way and
13:37 if it were I’m not sure if it would be
13:40 there the way the way things have gone
13:44 with these changes anyhow it did there
13:51 were a bunch of they call them cards or
13:55 whatever across the screen there where
13:57 you know they were kind of graphical and
14:01 easy to navigate like sales tax to was
14:04 their tax break down it showed you that
14:08 you know what you keep an eye on what
14:11 the sales tax do what you had accrued to
14:15 be owing all the agencies in terms of
14:19 set in terms of sales tax and tax break
14:21 down which was kind of the main area of
14:24 the screen it had sales tax amounts and
14:27 what was due this month what was
14:28 upcoming was overdue a lot of great
14:29 information then you had a opportunity
14:37 to view your return which was again
14:39 based on what it hadn’t already been
14:40 entered into QuickBooks Online when it
14:43 was time to pay
14:44 typically that was done on the say
14:47 States website where you would file that
14:49 return but you know it was all prepared
14:53 for him and it would also then record
14:56 the payment quickbooks online when you
14:57 click the record payment button finally
15:00 ur is history in the sales tax settings
15:02 sales tax settings that they do still
15:05 have where you can view at it mentor
15:06 agencies history that’s that the
15:11 comparable thing now is the the sales
15:15 tax liability report and you can view
15:19 previously paid or filed returns so the
15:23 old sales tax center had a lot of great
15:24 information now not as much I mean some
15:29 should does show what you oh here on the
15:31 main screen depending on breaks it down
15:36 by agency and that but it seemed to me a
15:41 lot more user-friendly previously there
15:47 were also the reports in the upper right
15:48 and sales tax liability report which
15:50 still has and taxable customer report
15:53 which might exist in reports now I feel
15:58 like it does let’s take a look here and
16:05 there were also shortcuts in a sales tax
16:07 center on the right side that navigate
16:10 to all the areas that fed into sales tax
16:12 calculation so you could jump straight
16:14 to him from there which was also handy
16:17 now you basically got I can mention the
16:22 sales tax owed that’s the main screen in
16:25 the sales tax center and the sales tax
16:29 liability report kind of your two
16:31 options and still-living talked a little
16:39 bit about the sales tax liability report
16:41 earlier and you select the appropriate
16:42 report period in tax agency and click
16:46 the run report button still loading
16:54 so that basically covers everything look
16:59 I know that was kind of a not the best
17:03 video ever I would love to give you more
17:10 up-to-date information but like I said
17:12 it seems like it’s in kind of in flux
17:14 for the time being so that is what it is
17:17 and I can always record a new video if I
17:20 have to in the future but so I don’t
17:25 know if you run into similar
17:26 circumstances then I did you saw me
17:28 struggling here and everything’s changed
17:30 where it’s located frankly it’s not as
17:33 not as robust as it used to be you know
17:38 and it can be a pain in the butt to deal
17:41 with so you know you’ve got a business
17:44 to run you’ve got sales that need to be
17:46 made and if you don’t have time to DIY
17:49 your bookkeeping you should check out
17:51 bots keeper what it is is a in essence
17:55 it’s a AI based bookkeeping but with a
17:58 human element to kind of qualifying
18:02 things you might say so a lot of the
18:05 tasks that you had to do are automated
18:07 and again you can work more on your
18:09 business you can work on bringing in
18:10 more sales and worry less about data
18:13 entry and worry less about slow internet
18:16 connections and fumbling around with
18:20 backwards changes they’ve made to
18:22 QuickBooks so there’s a link for that
18:25 down in the description if you want to
18:27 check that out and that’s all there is
18:30 so you know I still tried to make even
18:34 though things were a little wacky tried
18:36 to make this video quick into the point
18:38 upfront to get your answers and then if
18:41 you wanted to get into more detail you
18:43 know I tried to do that to try to give
18:45 you as much information as possible give
18:47 you this slides to reference and if that
18:50 worked for him
18:51 I would appreciate a like and if you
18:54 find yourself looking up topics on
18:57 QuickBooks Online fairly frequently and
19:00 want to skip searchbar in the future and
19:04 just check out my channel I
19:07 have posted and will continue to post
19:09 more videos if you subscribe you can do
19:13 that and yeah thanks for watching
19:15 take care

Periodic Sales Promotions in QuickBooks Online

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  • Periodic sales promotions give small businesses the best chance of boosting sales and profitability when they are carefully planned.
  • Care must be taken to not use periodic sales promotions as a crutch when sales fall short of expectations.
  • QuickBooks Online price rules give small businesses the opportunity to efficiently apply promotional pricing to products and services.
  • Small business owners, who are concerned about what effects sale promotions might have on revenue, can use this information to lower uncertainty

Periodic sales promotions

Weekly/monthly/holiday sales, aka periodic sales promotions, are something we’re all familiar with. The “one day only sale!” The “Memorial Day sale!” The “semi-annual sale!” Or, the most famous, the “Black Friday sale!” are all examples.

Before we get too far into it, let’s split hairs on the terminology a bit. A periodic sales promotion shouldn’t be confused with a discount or a markdown. A discount is a reduction in price for a particular group of customers. A sales promotion, typically, would apply to all customers.

A markdown is a “permanent” lowering of the price of goods in order to incentivize purchase so that they can be removed from inventory. This would be done for items that are slow-moving (or not moving at all).

Periodic sales promotions are a means of reaching periodic sales goals

Periodic sales promotions can help complement the efforts of salespeople and advertising. Whether your business markets to consumers or other businesses, a periodic sale can stimulate buying on the part of your customers.

Periodic sales promotions should compel your customers to purchase immediately. So, the nature of your promotion will have to be such that it bridges your customers’ culture with your sales goals. For example, are you trying to get customers to switch from a competitor? Or, are you trying to penetrate a whole new market?

Don’t launch a periodic sales promotion without a plan. Consider how the promotion will impact your business at different volumes. Decide what products/services should be included. Consider your best-case and worst-case scenarios so that you are mentally prepared for whatever your customers throw at you.

The upside of periodic sales promotions

Dead and slow inventory takes up valuable space. Worse yet, it ties up valuable cash. If you have inventory that is turning over slowly, you might consider how you can work it into a periodic sales promotion in order to make room for inventory that will actually sell. Doing so would be preferable to getting pennies on the dollar by discounting.

I wouldn’t offer a sale that revolved solely around dead and slow inventory, however. That might be a dud. Perhaps you might consider marking down dead and slow inventory extra – beyond the normal terms of the promotion. An example for a car repair business – a 10% off sale on brake replacement for President’s Day, with slow-moving tires offered at 40% off. Take advantage of the increased traffic to get the most that you can for the dead and slow inventory.

A periodic sales promotion might incentivize people who wouldn’t buy otherwise. If the promotion only runs for a few days, the sense of urgency could be increased. People who may only have a vague idea of what your business is about could be compelled to “check you out” while the sale is going on. Furthermore, the first-timers, if they are excited about what they found, might tell others.

Since a periodic sales promotion will hopefully bring in a lot of new faces, it’s an opportunity to collect some basic information. Even just an email address or a like on Facebook. Knowing more about your customers in general and those that were lured by the sales promotion specifically will help you to meet their needs better.

The downside of periodic sales promotions

Even the least savvy business person knows that if you sell something for less, you’ll make less profit on it. Periodic sales promotions will result in lower margins. The hope is – to make up for that with increased volume (quantities).

But, if you are able to pull off a successful periodic sales promotion, be careful not to begin to rely upon them. The siren song of a boost in sales/gross profit might prove irresistible if future sales don’t reach the levels you hoped. If periodic sales promotions are part of your strategic planning, then great. Run with it. Just don’t start using them as a crutch if things aren’t going as well as hoped.

When a customer purchases something at a reduced price, you might not be able to get a read on their future purchasing behavior. That is, beyond the fact that they’ll buy “x” amount of something at “y” price.

We’ve all heard the old adage “price, service, quality…pick two” when it comes to offering a value proposition to customers. If your business aims to excel in service and quality, but begins to succumb to the temptation to lower prices to boost sales, then you might see yourself transformed into a low-price provider – at the expense of service or quality.

It always comes down to…planning

Again, at the risk of being redundant, it all comes down to planning. Give your periodic sales promotions the thought and planning they deserve. Don’t just “knee-jerk.” Working it into a plan will give it the best chance of being successful.

Every industry is different. Every small business within an industry is different. There is no “one size fits all” solution to planning for periodic sales promotions. Nevertheless, since this website is SpreadsheetsForBusiness.com, after all, I took a stab at it.

Download the periodic sales promotion planning tool.

Complete the form below and click Submit.
Upon email confirmation, the workbook will open in a new tab.

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Click to enlarge

This is a very high-level workbook since it isn’t specifically made for any particular business/industry. Hopefully, however, it can give you a starting point for thoughtfully planning your own periodic sales promotion. Helping to ensure that it fits in with your strategic plan and helps your business reach its goals.

Periodic discounts in QBO

How to apply this knowledge in your accounting software, though? Well, here’s how you might go about it in QuickBooks Online.

We’ll look at periodic sales three different ways through the eyes of a restaurant:

  • First, an across-the-board 10% discount for everything. We’ll call it an “anniversary sale.”
  • Second, a 20% off of Mexican food and drinks promotion for Cinco de Mayo.
  • Finally, a weekly 15% off promotion for select desserts.

If you haven’t, read my previous post on the particulars of QBO price rules (levels). What follows won’t necessarily go into as much detail.

I’ll be using the sample company within QuickBooks Online Accountant. By default, this sample company is a landscaping business. For the purposes of these examples, I’ll make some changes to make the examples better reflect a restaurant business. But, if you see some odd things related to landscaping pop up in the screenshots or the video – that’s why.

In the previous example, we created a “dummy” price rule that provided no discount. We did this so that the price rule would not be applied by default during a sales transaction. However, in this example, for our restaurant, we want it to be automatically applied so that we don’t forget to give it to our customers. So, in this case, we’ll forego the creation of a “no discount” price rule.

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Anniversary promotion

The across-the-board 10% discount is easy to set up. In the price rules screen, we’ll create a rule called Anniversary Sale. This rule will only be in effect over the weekend of April 27, 2019.

Since it is an across-the-board discount, All customers and All products and services will remain selected by default. A 10% decrease in price will be applied.

Simple.

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Click to enlarge

Cinco de Mayo promotion

Next, we’ll look at the Cinco de Mayo promotion. In this case, it’s only our restaurant’s Mexican fare that’s on sale. Also, the sale only runs over the weekend – May 3, 2019, through May 5, 2019.

In this price rule, we selected the products in our Mexican subcategory. We then chose to decrease the price by 20%.

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Click to enlarge

Weekly dessert promotion

Finally, we’ll tackle the restaurant’s weekly (Wednesday) discount on desserts, designed to get people in the seats during the slow mid-week time period.

This was approached in much the same manner as the Cinco de Mayo discount. Except, there is no Start date and no End date. This is an ongoing promotion. All products in the Desserts category were selected for inclusion and they were decreased in price by 15%.

dessert-discount
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Periodic sales promotions

When it comes to pros & cons, advantages & disadvantages, upside & downside posts, I always overlook a few. What are some of the pros and cons I missed for weekly/monthly/holiday sales promotions?

What other considerations need to be taken into account before a small business launches a weekly/monthly/holiday sales promotion?

Join the conversation on Twitter!