How Sales Taxes calculated on Bills will Work in Contractor Foreman (Reporting Purposes Only)

Tracking Sales Tax on Purchases for Job Costing

If you want to track sales tax on purchases separately for job costing purposes, complete the following setup:

In QuickBooks

1. Create a new Cost of Goods Sold (COGS) account named Tax on Project Purchases – COGS in the Chart of Accounts.
2. This account will be used to track sales tax paid on vendor bills separately from the underlying material, labor, or subcontractor costs.

In Contractor Foreman

1. Create a new Cost Code named Tax on Purchases.
2. Create an Other Cost Item named Sales Tax (Purchases) that can be used on bills and purchase transactions.
3. Map the Tax on Project Purchases Cost Code in Contractor Foreman to the Tax on Purchases – COGS account in QuickBooks.

This setup allows sales tax on purchases to be tracked separately for job costing and financial reporting while ensuring transactions sync correctly between Contractor Foreman and QuickBooks.

Enter the pre-tax amounts as separate line items on the bill in Contractor Foreman and enter the sales tax as its own line item using the Tax on Purchases cost code.

Syncs to QuickBooks

How This Appears in QuickBooks Financial Reports

On the Profit and Loss report, Tax on Purchases will appear as a separate Cost of Goods Sold expense. This provides visibility into the amount of sales tax paid on job-related purchases while keeping it separate from labor, materials, and other project costs.

By recording sales tax separately, the total costs in QuickBooks will match the costs recorded in Contractor Foreman, and the combined pre-tax amounts plus the Tax on Purchases amount will equal the total supplier bill payment.