We use another system for invoicing and journal entry revenue into QBO. Can QBO calculate sales tax liability in this scenario?

Good day, mkoplan.

Yes, QuickBooks Online can calculate sales tax liability. You can consider Deity Alpha's approach for your transactions from ModMed.

The program's automated sales tax feature computes the sales tax from an invoice, sales receipt, or sales form within QBO. It considers various factors, including whether your customer is exempt from sales tax, the location of your sales or shipment, and the specific category associated with your product or service. Since you're using a different system for invoicing and recording the revenue, we can add your data as a sales receipt, representing a completed sale where payment was received at the time of the transaction.

Meanwhile, a journal entry is a manual transaction that moves money between accounts and cannot automatically trigger the sales tax calculation. However, you can post the sales and the corresponding liability to the correct accounts if the ModMed system calculates the sales tax first. In this case, I recommend consulting an accounting professional or seeking assistance from our QuickBooks Live Expert Assisted for guidance on handling these entries.

Explore setting up your sales tax in QuickBooks Online to learn how to add or edit and configure sales tax settings.

Let us know if you require additional assistance with managing accounts or entries. We'll be here to walk you through the steps or provide an example.