Why Does My Sales Order Sales Tax Item Remain Open?

Use a QuickBooks tax code or change the item type

Problem

Your sales order remains open, even though Connex synced an invoice. 

Description

QuickBooks will not close a sales order if one of the lines includes a Sales Tax Item. This is a common occurrence when Add tax as a line item is selected in the automatic mapping section of sales tax settings.

Solutions

#1 Map QuickBooks tax codes

1. In Connex, disable the Add tax as a line item setting in the automatic mapping section of sales tax settings.
2. Use Manual Mapping to apply tax codes by either uploading a .CSV file or entering individual codes.

For additional information:

• The following article provides details on mapping tax codes: How Should I Map Tax?
• Connex also supports grouped tax code: Do You Support QuickBooks Grouped Tax Codes

#2 Create sales tax as a service item

1. In Connex, enable the Add tax as a line item setting in the automatic mapping section of sales tax settings.
2. Identify the naming convention used by your commerce channel when adding tax as a line item to a QuickBooks order.You can do this by either reviewing an existing order or importing a test order (for instance, Shopify uses the naming convention ‘ShopifyTax’).
3. Find the Sales Tax Item in your QuickBooks file that matches this naming convention. Change the name of this Sales Tax Item to something else (eg, ShopifyTaxOLD).
4. Next, you need to create a new QuickBooks Item that is not a Sales Tax Item.
5. Create a new Service Item and use the exact same name as the previous Sales Tax Item (eg, ShopifyTax).
6. Now create a new liability account (you can call it whatever you want). Assign this liability account to the new Service Item. This option allows you to import sales tax as a line item without using a Sales Tax Item in the line.
7. The sales tax amount will apply to the liability account. We recommend using journal entries to manage debit sales tax income and credit sales tax payable, on a scheduled interval. This can be done under Company > Journal Entries:

(Thank you to Ward Hopkins for the helpful suggestions to this article.)