A Guide to Fixing Sales Tax Rounding Errors in QuickBooks

QuickBooks uses a rounding method to calculate sales tax. For example, if your input rate/unit price was 37.37499999, it would be rounded to 37.37500000, and thus, the further procedure for the amount calculation might be inconsistent. However, this method of calculating taxes may cause discrepancies between the taxes on invoices and sales orders. We understand how frustrating it could be, especially when they affect your ability to close out sales orders.

Consequently, it creates discrepancies in reports and prevents sales orders from being fully closed. To resolve this, you will need to use adjustments to align the amounts properly. Below, we have provided you with a step-by-step method to align the amounts. Delve deep into the blog and follow the instructions as mentioned to overcome the sales tax rounding error in QuickBooks.

If you fail to resolve rounding errors in QuickBooks, consult a professional to tackle this problem. Give a call to +1-855-888-3080 and directly speak to a certified Pro Advisor.

Step-by-Step Guide to Solve the Sales Tax Rounding Error in QuickBooks

After understanding what a QuickBooks sales tax rounding error is, let's address its resolution and resolve all the related issues.

Review Sales Order and Invoices:

• First, identify where the discrepancies have occurred.
• Move to the Customers menu.
• Click on the Customer Center.
• Locate the Sales Order.
• Open the sales order.
• To determine the penny difference in sales tax, review all related invoices.

Adjust the Sales Tax on the Invoice:

• First, you need to open each invoice that is related to the sales order.
• Choose the Sales Tax field.
• Adjust the sales tax amount to redress the rounding off difference.
• Note: Adjust the amount by a penny to match the sales order.

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Generate a Sales Order Adjustment Item:

• Click on the Lists menu.
• Click the Item List.
• Select the Item.
• Choose New.
• Now, create an Other Charge item which is called Rounding Adjustment.
• Later, you should link this item to an appropriate income or expense account for tracking purposes.
• Save the new item.

Apply Rounding Adjustment:

• Open the sales order.
• Add the Rounding Adjustment item.
• Now, input the amount required to correct the discrepancies.
• These steps will be repeated for all connected invoices to the sales order.
• Save and close both transactions.

Verify and Close Sales Order:

• Traverse back to the Customer Center.
• Verify that the sales order status is being displayed as closed.
• Now, to check that the sales order doesn't appear as open due to the rounding differences, run the reports.

The Bottom Line

To give you an overview of the blog, we can consider that sales tax rounding error in QuickBooks often occurs in this application because it calculates sales order taxes through rounding off by the second digit. To address these issues, we have outlined five easy-to-implement solutions. We hope that the information is beneficial and helpful in fixing the problem. If you have issues, rectify the error or want to directly connect with a professional, give a call to +1-855-888-3080 and let them assist you throughout the procedure.

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