How do I record expenses on a sales invoice. When recording HST on sale and expenses why does it net out. No ITC credit on HST paid

Hi there,

Welcome to the Community. Making sure you're recording your transactions the right way is a good exercise for preventing errors in your books. 

I recommend contacting an accounting professional to get more info on this. If you're not in contact with one, I encourage you to search for one on our website using this link here. Doing this will help prevent any future discrepancies. Let me know if you have other questions. I'm here to help. 

Having the same issue here but on QBDT. So far what I am doing is pulling a report on the CGS GST and moving it to the ITC's via JE since that is where they should be going in the first place. I am going to continue playing around with sales tax codes and see if I can link a new code on cost of sales. 

There are so many instances where it is necessary to have deductions appear on invoices such as referral fees and many examples in the agriculture industry (cattle sale deductions, grain sale deductions, consignment fees for equipment etc) 

I found this thread as I was looking for a better way to record our crop income with our drying and check off fees from the grain elevator deducted from that income. Our accountants have it set up a certain way which gets the job done but has some drawbacks which was my reason to see how other people are entering these types of payments. The way they have it set up for us is that when I receive a payment for our crop income I record it as an invoice first. I enter the total crop income (for us this is non-taxable), in the "account" section of that line item I use an income account called Farming. To enter the drying and check off fees I enter that as another line item on the invoice using an expense account called Farming - Expense, I enter the expense in the "rate" section as a negative number, this line item of the invoice does have HST (we're in Ontario) applied to it. At the bottom of the invoice in the area where it totals everything the HST section is shown as a negative number with the total amount mirroring the total amount I was paid from the grain elevator. From there I apply my payment received to that invoice and then can deposit the amount into the appropriate account. Upon reading this thread I became worried that doing it this way we might not have been entering the HST paid properly and thus not claiming it on our quarterly HST filings. I took a look at our GL and it does appear that doing it this way is recording the tax paid correctly. The drawbacks to this method is that although the invoice you have created appears to be paid in the customer center and on the invoice itself, when you go to the apply payments window to this customer account it shows that all invoices are outstanding, and when you "Assess Finance Charges" this account always shows up with a balance owing and thus the software always wants to add finance charges to it. Although those small details bother me (perfectionist over here), this method is working for us and I can enter the payment in less than 5 minutes. I thought I would share in case it helps someone coming across the same issues. If anyone has come up with a better way that is just as easy to enter, please share!

We're having the same problem but with livestock settlements.  And we're using Quickbooks desktop, but it's the same issue.  We receive $X for the livestock and then expenses like trucking & levies are deducted from it.  We need a way to record the HST paid on the expenses to be recorded as ITC's paid on purchases (there is no HST on livestock sales).  I see no way to create a sales item for this as when I try, error messages pop up.  We are currently recording it as a debit to HST collected on sales and then do a Sales Tax Adjustment journal entry quarterly (when we file HST) to reallocate it.  Since this thread is older and Quickbooks has stopped replying to it, it doesn't seem that they are interested in fixing this problem.