CASH based sales tax envelope

Good day, @Abey564.

QuickBooks Online's (QBO) automated sales tax is indeed accrual-based, recognizing tax at the time of invoicing. This is because, from an accounting perspective, the sale is considered to have "occurred" when the invoice is issued.

As of now, QBO doesn't directly support cash-basis sales tax tracking. If you'd like to calculate sales tax based on when the customer pays, you can use sales receipts instead of invoices. Sales receipts record transactions at the time of payment.

Alternatively, to maintain your method of creating invoices in advance but calculate sales tax only when the customer pays, you can explore third-party tools that integrate with QBO and support cash-basis tax tracking. To find such tools, follow these steps:

1. Log in to your QBO account.
2. In the left panel, choose Apps and then click Find Apps.
3. Search for a specific app using the Search bar or Browse categories and industries dropdowns to refine your options.

Feel free to post again if you have any additional questions.