Set up manual tax in QBO with Touchless Integration

Overview

Manual tax setup in QuickBooks Online (QBO) integrates seamlessly with Touchless Integration, providing you with a streamlined workflow if you prefer not to use the Automated Sales Tax feature with QBO. This process allows for accurate tax handling by leveraging tax zones configured in ServiceTitan and mapping them to a designated sales tax payable account in QBO.

Things to know

   
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  This workflow only applies if you are integrated with QuickBooks Online through the Touchless Integration feature. For more, see Touchless Integration overview.

     
   
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  You must have your tax zones configured in ServiceTitan showing the correct tax rate. For example, if a customer charges 6% sales tax, a tax zone with that rate must exist. For more, see Set up sales tax in ServiceTitan.

     
   
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  No additional tax items need to be created in ServiceTitan as long as the correct tax zones are in place.

     
   
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  You do not need to map individual tax zones to a GL account in ServiceTitan. All sales tax entries, regardless of their tax zones in ServiceTitan, will be posted to the single GL account in QBO designated for sales tax.

     

How it works

When using the manual sales tax setup with Touchless Integration, you no longer need to manually map each item to a GL account. 

   
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  ServiceTitan tax zones define the tax rates and calculations for transactions.
   

         
     
   
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  These tax amounts are exported directly to QBO and recorded in the Sales Tax Payable general ledger account.
   

         
     
   
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  Tax payments are managed in QBO by reconciling the Sales Tax Payable account with collected taxes.
   

     

Set up manual sales tax with Touchless Integration

To use manual sales tax tracking in QBO while using Touchless Integration, do the following:

   
1.        

   Set up sales tax by tax zone in ServiceTitan

      
   
2.        

   Ensure you have a GL account in QuickBooks Online designated for sales tax

      
   
3.        

   Confirm that tax account names between ServiceTitan and QBO match

      

Step 1: Set up sales tax by tax zone

The Sales Tax by Tax Zone setup allows sales tax to be tracked by location-specific rates. To do this, you need to create tax zones and set the tax rates for each tax zone.

To set up your tax zones in ServiceTitan:

   
1.        

   Go to the navigation bar and click Settings .

      
   
2.        

   In the side panel, go to Invoicing > Tax Zones. 

      
   
3.        

   Click Add Tax Zone.
    

          
      
   
4.        

   Enter a Name for the tax zone. For example, you can enter Glendale or Los Angeles County.

      
   
5.        

   Enter a Tax Rate.

      
   
6.        

   Enter the zip codes you service into the ZipCodes field. This is how ServiceTitan determines which tax zones are assigned to your customers.

          
              
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     If you have certain sales tax rates that only apply to one or more zip codes, enter that zip code or those zip codes.

                
              
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     If you have one rate for all zones for your business, you can enter an asterisk (*) instead of listing the zip codes. This assigns the tax zone to every customer by default, unless their address has a zip code that is listed in another tax zone.

                
              
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     If you don't want taxes to be calculated and instead want taxes applied on a job-by-job basis for the zone, leave the ZipCodes field blank.
     

                
          
          
      
   
7.        

   Click Save and repeat these steps for each tax zone as needed.

      
   
8.        

   After creating the tax zones, click Set Tax Zones. This applies the changes and assigns your customers their respective tax zones.

      

Step 2: Ensure you have a GL account in QBO for sales tax

Make sure you have a GL account in QuickBooks Online designated for sales tax and label this account Sales Tax Payable. All sales tax amounts exported are posted to this GL account.

For more on creating a GL account in QBO, see Set up GL accounts in QuickBooks Online.

Step 3: Confirm tax account names match

Confirm that the default tax account names both ServiceTitan and QBO match. For example, the account name Sales Tax Payable in ServiceTitan should also be labeled the same in QBO. This maps the accounts and  ensures all sales tax amounts exported from ServiceTitan are posted correctly in QBO.

Review tax collected

To review tax collected during specific time periods, you can use the following tax reports in ServiceTitan. These reports provide a breakdown of tax amount by tax zone, invoice, and collection date, helping you ensure accuracy and compliance when remitting taxes.

   
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  Tax Zone Report

     
   
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  Tax Detail Report

     

Paying sales tax

When paying sales tax, you can write a check directly against the Sales Tax Payable ledger account to reduce its balance.

Want to learn more?

   
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  See Touchless Integration overview

     
   
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  See Set up manual sales tax in QBO