Category Archives: QuickBooks

How to record the GST paid on your behalf by the forwarder in QuickBooks?

The non-GST registered overseas supplier will not be billing you GST for the goods imported, but you have to pay the GST directly to the Custom or the forwarder if they paid on your behalf.

Assuming the bill received is S$100,000.00. You enter the Bill into QuickBooks Online (QBO) as debiting the cost of goods sold and crediting the accounts payable with NR (non-registered trader) or OP (out-of-scope purchase) GST code. Note: It debits the inventory assets instead of the cost of goods sold if you are using the inventory feature in QuickBooks.

Enter Bill in QuickBooks

Let’s say the forwarder billed you:

  • Transport/Trucking/Storage charges: $5,800.00
  • Custom clearance charges: $150.00
  • Custom documentation fee: $30.00
  • 7% GST (paid on behalf): $7,000.00

Subtotal: $12,980.00
GST 7% (on $5,800): $406.00
Amount due: $13,386.00

The $7000 is the GST paid on your behalf, whereas the $406 is the GST for the forwarding services.

So, you record the forwarder bill into QBO as:

  • Row 1: Freight Charges: 5,800.00 (7% GST)
  • Row 2: Freight Charges: 150.00 (OP GST Code)
  • Row 3: Freight Charges: 30.00 (OP GST Code)
  • Row 4: Cost of Goods Sold: 100,000.00 (with 7% GST)
  • Row 5: Cost of Goods Sold: -100,000.00 (OP GST Code)
Enter Bill in QuickBooks


  1. Row 4 indicates the taxable amount of $100,000 for the $7000 GST paid, which will show in the GST Form 5 report.
  2. Row 5 is a reverse of the taxable amount of $100,000 from the cost of goods sold since the actual purchase has already been recorded (Supplier Bill).

GST Form 5 box number 7, input tax and refund claims:

QuickBooks GST Report

Exchange rate

The taxable amount in the Singapore dollar is converted based on the Custom exchange rate, which may be different from your system exchange rate. Therefore, the taxable amount (Singapore dollar equivalent) in the forwarder bill may not be the same as the supplier bill you entered earlier. You claim according to what you have paid.

QuickBooks Online (QBO) is a cloud-based accounting system. It uses a web browser to access your company file without the software installed on your computer. You may contact us if you wish to switch to QBO from QuickBooks Desktop or Reckon Accounts.

How to record retention in QuickBooks?

Retention is money withheld by the customer of a contract (project); protect the customer against incomplete or defective works. The retained sum is usually released to the supplier once the project ends or after the warranty period.

Assuming the sum withheld is at every stage of the progress claim. For a progress claim of $100,000 with 5% retention, the journal behind the sales invoice will be:

DR. Accounts Receivable $101,650
DR. Retention Receivable $5,000
CR. Sales $100,000
CR. GST Payable: $6,650

To record the retention in QuickBooks Online, first, you create a retention item (can be a service item) and link it to the retention receivable (a current assets account). Then, use it in the invoice with a negative value to reduce the invoice total (the objective is to reduce the receivable and not the revenue).

To view the retention receivable, you may run a report for the retention receivable account (from the Chart of Accounts) and group it by the customer to check the retained sum by the customer or for a job (if you are using the project feature in QuickBooks Online).

QuickBooks Retention Report
Retention – Quick Report

You may then issue an invoice to the customer for the retained sum once the project ends. The journal for the invoice:

DR. Accounts Receivable $5350
CR. Retention Receivable $5000
CR. GST Payable $350

QuickBooks Online is a small business account system suitable for small businesses and SOHO. Although it does not have a complex project accounting feature, it should be sufficient for basic project tracking.


  1. The letter of claim is not a tax invoice, and the retained amount has to account for the GST upon payment received or invoice issued, whichever earlier.
  2. To create an account in QuickBooks Online (QBO):
    • Click on the Gear icon and select Chart of Account from the list.
    • Click on the New button in the Chart of Account list to add an account.
  3. To create an item in QuickBooks (QBO):
    • Click on the Gear icon and select Products and Services.
    • Click on the New button in the Products and Services list to add an item.

Record Credit Card Surcharge

Credit cards and other electronic payments (e.g. PayNow or bank transfer) are payment methods used these days among businesses, especially during the COVID pandemic. It won’t be easy to prepare documents and get the authorised signatory when working from home. Electronic payment, on the other hand, is convenient. The accountant can arrange the payment remotely, and the management or business owner can do the approval seamlessly online. Going digital does improve productivity.

Although electronic payments are convenient, it comes with a price. Usually, there is an annual fee for using the electronic payment service and a surcharge on each transaction.

PayNow and Giro will be easier to manage than a credit card. PayNow and Giro charges are usually shown in the bank statement separately from the amount received from the customer, whereas the credit card only remits the net received. Besides, special promotions or cashback will also sometimes add to the complexity of accounting.

Assume the credit card charge is 3.5% on each transaction. The surcharge incurred will be $35 based on a $1,000 invoice. That is, you received $965 instead of $1,000 if the customer paid via credit card.

How to record the payment received from the customer?

Try not to use the discount feature in the Receive Payment transaction of the QuickBooks Desktop for surcharges incurred when the customer paid via credit card (unless you are not sending the monthly statement to the customer). The QuickBooks discount feature is for a sales discount given to the customer, not surcharges or bank fees associated with the payment.

Discounts and Credits in the QuickBooks Receive Payment

A sales discount is a discount given to the customer to accelerate payment. Assuming the payment term of an invoice is 30 days. The customer enjoyed a 5% sales discount if they paid before the invoice was due. A sales discount is to encourage early payment and ease the cash flow.

The surcharge incurred shows as a ‘Discount’ on the statement if you used the discount feature in the Receive Payment transaction for credit card charges. It will be odd to see a discount and confusing.

QuickBooks Statement

A better way is to hold the payment received in the undeposited fund account. Since the credit card company will remit to you a few days later (depending on your arrangements with the finance company) and the customer has indeed paid in full, holding the fund in the undeposited fund account could be a better option.

Record deposit.

After receiving the payment into the undeposited fund account, use the Record Deposit feature to transfer the fund received (less the surcharge) to the ledger bank account when the financial company transfer the money to your bank. The net amount shown in the ledger bank account will facilitate the reconciliation later.

Alternatively, you can deposit multiple transactions at one go if you find that recording deposits one at a time is tedious. Follow the credit card statement, select those transactions from the Record Deposit window, and deposit them with all the surcharges added up into a single line. Although this method is faster, you need to spend more time reconciling; and the credit card statement will be the supporting document.

Journals behind the transaction.

If you use the discount method for a surcharge in the receive payment transaction, the journal behind debits both surcharge expense and bank and credit the receivable account.

The journals behind the two transactions in the undeposited fund method:
Receive Payment:
Debit Undeposited fund
Credit Accounts receivable

Record Deposit
Debit Surcharge
Debit Bank
Credit Undeposited fund

Although either method gives the correct ledger, I would prefer using the undeposited fund to the discount method since the statement format is my concern and the accounting flow is clearer.