Many of you know that for several years, I was honored enough to put 'pen to paper' and record the escapades of 'The Data Detective.' Well, recently one of our regular readers wrote in asking if 'The Data Detective' was still accepting new cases.
Sadly, I must report that the ‘Data Detective’ is no longer with us. It seems that a meteor crashed into his small rowboat while he was fishing on a hidden lake in Greenland. Not only was he immediately incinerated but his ashes turned into snowflakes for which his known relatives were fined for contaminating a pristine nature area. That’s what you call a ‘triple-whammy.’
By the way, we here at Insightful Accountant thought about holding a memorial service for our old friend, but there wasn’t enough left of him to fill the empty ‘pepper shaker’ we hoped to use as an urn.
None the less, I advised the reader who wrote in that I would spread the word of her plight and see if any of our other readers had any advice, good or bad, in regard to her situation.
The Problem
It seems that an accountant decided to migrate his client from QuickBooks Enterprise into QuickBooks Online Advanced using the Intuit migration option.
As a part of the migration, all of the client’s Invoices transferred over into QBO-Adv without the sales tax being included on the invoice, resulting in the invoice totals being low by the amount of the sales tax recorded in QB-Enterprise.
The result produced credits for every client based on the payments they made for the total invoice amounts including sales tax. Accordingly, the A/R is now understated.
At the same time, the sales tax liability shows a significant ‘negative’ value resulting from the sales tax payments that migrated over, even though the accumulated sales taxes from invoices failed to post.
The Debate
There are at least three questions here that we are asking readers to consider. If you have a response or comment regarding these inquiries, post those in the ‘comments below.’
"Somewhere in the eternity of time and space, I think the Data Detective is probably mumbling to himself... "Go to Jail, Go Directly to Jail, Do Not Pass Go, Do Not Collect $200.00"!"
1) Could anything have been done prior to, or as part of, the migration process, to prevent this from happening?
- I will simply mention that Intuit’s official ‘Help Document’ regarding what will and won’t migrate says under the topic of Sales Tax “Sales Tax won't copy for all transactions. Some taxes will copy as journal entries.”
2) Intuit’s technical support told the client they needed to open each and every historical transaction, ‘tweak it’ and then QuickBooks would recompute the sales tax and adjust the total amount of each Invoice.
- This is the old "force QuickBooks to do what it should have done in the first place" routine. We've heard it in Desktop, and now we are hearing it with Online.
- Since there are thousands of transactions over many years of data, this is highly impractical, time-consuming, and costly.
- What do you think?
- It might be possible to use a 3rd-party product like C-Data’s Excel Add-in for QuickBooks Online, pull in the Invoice table, perform a balancing transaction (formula in the Sales Tax column), then save that and run the ‘update’ source data table with the new information. It would be necessary to ensure that the sum totals of the adjustments at a maximum (a past year’s data) match the A/R and Sales Tax discrepancies for those years.
- Has anyone out there in ‘IA Reader-land’ ever done something like this?
3) Another possibility is to make either a monthly, quarterly, semi-annual, or annual journal entry, to correct the A/R discrepancy offset by Sales Tax liability on a client-by-client basis.
- You might choose to do this on an annual basis for ‘past years’ like 2022 and further back, but on a month-by-month basis for 2023 and YTD so that the balances will correspond with the more recent years' sales tax reports previously submitted.
- How would you handle this option?
Do you have any other ideas? If so, let us hear from you by posting a comment below.
One final note. I know that Intuit's technical people are very much aware of problems that exist with the migration of 'sales tax data' from QuickBooks Desktop to QuickBooks online, especially when a QBD data file has a long history of 'changing sales tax.' There are also issues with 'set-up of automated sales tax' in QBO and the teams that work on these problems are devoted to resolving them. That may not 'comfort those' in immediate need of problem resolution, but it should shine a light on the long-term path of a solution.