Entering a Yellow Pages bill with first installment amount and full tax amount in QuickBooks

Legacy KB ID: 1800

Question

How do I enter a Yellow Pages bill with first installment amount and full tax amount in QuickBooks?

Answer

Yellow Pages have an option of billing customers in installments. The first bill received by the customer will have the first monthly installment amount on it, and the entire tax amount (which is usually higher than the installment amount itself). In order for the BAS feature to report this correctly, the following method will need to be implemented when entering the bill.

This example has an initial Yellow Pages bill of $1320 with $120 of tax applied to it and monthly instalments of $100.

To enter this expense into QuickBooks, create the following accounts and transactions:

Accounts:

• Create a new Other Liability Account called Yellow Pages Liability
• Create a new Expense Account called Yellow Pages Expense

Transactions:

1. Create a Bill using the Yellow Pages Liability account for the first installment amount of $100, with no tax code

2. Create a General Journal as follows:
• Yellow Pages Liability = $1320 in credit column
• Yellow Pages Expense = $1200 in the debit column. Select the appropriate tax code on this line, with $120 of tax which balances the general journal

Ensure this transaction is dated the same as the bill in step 1.

3. Create a General Journal as follows:
(This reflects the tax amount being deducted from your bank account)
• Bank account = $120 in the credit column
• Yellow Pages Liability = $120 in the debit column

Ensure that this transaction is dated the same as the payment for the bill in step 1.

4. Create a bill using the Yellow Pages Liability to show ongoing monthly installments of $100

After these transactions are made, your statement from your bank will show a payment of $220, however you will need to reconcile this as two transactions in QuickBooks.

How did we do?

Changes to Item Description of a billable expense on a bill not reflected on the invoice

Related Articles

Incorrect total and tax amount when using timesheets with a bill and Amounts inc tax ticked.
Different total amount figures when entering a bill incl/excl of tax.
Entering Gross Amounts (Tax inclusive) or Net Amounts (Tax exclusive) in your transactions.
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