Creating a Simple Invoice for Taxable & Non-Taxable Items
Creating a simple invoice for taxable and non-taxable items, that the customer can easily understand – while allowing you to track your Sales Tax Liability often causes a quandary for QuickBooks users. The following question, submitted by a reader, is a perfect example of just how difficult this situation can sometimes be.
We are curious if there is a way to do this:
We do cable Runs and would like to quote our customers $150.00/drop to include labor and materials.
How do I calculate sales tax on a portion of the $150.00? Is that possible. We have been breaking it out.. but it is tedious and confusing to customers. Any Ideas?
Thanks for your help.
That certainly is a dilemma – you need to be able to accurately track your Sales Tax liability for taxable sales and provide a simple to read invoice to your customer all at the same time. Have you thought about using/creating a QuickBooks Group Item? Here’s how it would work:
- Start by going to your Item List in QuickBooks, edit your Labor and Materials items – setting the appropriate Tax Code for each item, for example if Labor is taxable you would set the Tax Code to Tax and then make sure that the Materials item was set to Non.
- Next, click the Item button, at the bottom of the List, choose New, change the Type to Group, give it a meaningful Name or Number, in the Description type in “Cable Runs” – or whatever you want to have displayed on the invoice, DO NOT check the Print Items in Group option, and select your Labor and Materials items (your window should like the one shown below).
Now, go ahead and create an Invoice, using the new Cable Run Group Item, making sure that the invoice is set to calculate your Sales Tax amount, this is what you’ll see on your screen:
When you print your invoice, this is what the customer will see:
While this may not be the perfect situation, because the invoice may still be confusing to the customer, it is the one that will require the least amount of additional work for you when it’s time to pay your Sales Tax Liability.
I hope this helps.