One of the scariest things to do as a novice bookkeeper is government filings. Even when clients actually file their HST return with the CRA, the fear persists and often makes them hesitant to click the “File” icon within QuickBooks™. This is a mistake because the software is designed to self-correct HST remittances for any new or changed entries within a past filing period, but it’s important to note that this feature only works when you actually lock down your return amounts in QuickBooks™ as filed.
Here’s an example:
Let’s say that QuickBooks™ is telling you that you owe $4000 in HST.
You file the return with CRA, knowing that it’s the best information you have at the time. You also go into your QuickBooks™ file to the File Sales Tax page and click on Mark As Filed (QB Online) or File Return (QB Desktop). QuickBooks™ now knows that you have filed the $4000. A week later, a late supplier bill comes in which is dated within the now-filed HST reporting period and from this bill you record another $15 in HST paid. QuickBooks will put the $15 Input Tax Credit onto your next return, because it knows that you have already filed without this amount. This works for any changes to your HST, whether it’s a new entry, a deleted entry or a change in amount.
Now suppose that you filed the $4000 HST with CRA but you did NOT indicate in your QuickBooks™ file that you had completed your return.
When the supplier bill arrives a week later, the QuickBooks™ return for that period will display the amount of $3985 instead of $4000 because it’s picking up the additional $15 ITC. You can get around this but you will have to jump through a few hoops to get QuickBooks not only to recognize the amount that you had actually filed but also to get it to move the $15 ITC to your next HST return so you don’t miss out. If you had locked down your HST return in QuickBooks™ when it was still displaying the $4000 that you actually reported to CRA, you wouldn’t have to do a thing because QuickBooks™ would handle it for you.
If you have any issues using the Sales Tax feature in QuickBooks™, give BookSmarts a call today – we are your QuickBooks™ experts and we can help you get back on track.
Michele Craig is the founder of Booksmarts, Central Ontario’s leading supplier of QuickBooks, QuickBooks Online & Wave Accounting Training.
A self-professed ‘accounting geek’, Michele is a Chartered Professional Accountant and Certified Management Accountant with over 25 years experience in implementing and managing accounting systems. She is a certified trainer for adults, a Certified ProAdvisor for QuickBooks™ and QuickBooks Online™ and a member of the Wave Pro Network.