This content was created by Ronika Khanna. This content was uploaded by Ronika Khanna. This is a YouTube video titled "How to Reconcile Sales to the Sales Tax Report in QBO" created on April 23, 2025, by Ronika Khanna. It is a tutorial where Ronika Khanna, founder of Montreal Financial, explains how to identify and fix discrepancies between the profit and loss report and the sales tax report in QuickBooks Online, providing step-by-step guidance and additional resources for small business accounting.
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Hello everyone. A frequent cause of frustration in QuickBooks Online and other accounting software is when your sales per your profit and loss report does not agree to the sales tax report. In this tutorial I am going to show you a quick, quick way to determine what the discrepancy is and how to fix it. My name is Ronica Canna. I am the founder of Montreal Financial where you can find lots of resources for small businesses. So first of all what we're going to do is we are going to go to our profit and loss report. So I'm just going to go to my standard reports, click on profit and loss and I am looking at last quarter as that is the sales tax return that I'm filing. So if I click on that I can see here that my sales are $120449. But when I go to my sales tax report and I am going to open this in a new tab, you can simply right click open a new tab so you can compare both.
And I click on Prepare Return.
You'Ll see that my sales are 131,000. So this is very annoying and frustrating but the fix is actually quite simple. So what we're going to do now is I'm going to go back here and I am going to go to my reports.
And I'm just going to click on standard reports again, open link in, mute. And then here I'm going to just type in sales tax Taxable sales summary. This is a report that you want. It's called the taxable sales summary. So let's click on that.
And here you see the breakdown. So I want to make sure that I am using last quarter.
And so when you take a look at this you'll see I have 124.49 which agrees to my profit and loss report. But in addition to that and that's for GST qst but there are some exempt sales and so what probably happened and when I click on this I can see that this was actually a deposit from the government and this would in fact be out of scope tax. You do not want this to appear on your sales tax return at all. So you would click on that and change the tax code from.
Exempt as it is here to out of scope. Now I'm not changing the sales tax on the interest because exempt is actually the correct treatment of this. It's not going to have a big impact on your GSTHST return. So you can leave it as is. But you'll see both of these were refunds relating to income taxes, they should be out of scope. So I'm going to save and close and once I refresh this, it disappeared. So now let's just make sure. Let's go to our sales tax return. So I'm going to close that click on Prepare Return and then you'll see it is very close to the 12449 and now we know that this difference is 3953. Now one thing to keep in mind is sometimes your sales exempt or zero rated are in fact the correct category. They might be interest earned, we'll see here as other income and that might be part of what the discrepancy is on your GST HST return or your GST agency. In Q GST return you would show that separately as exempt sales or zero rated sales. And I have in fact two videos on how to do your GST HST return through cra, my business account, and one for Revenue Quebec as well for the GST and QST in Quebec. I'll link to them in the description and I hope this is going to help a lot of you feel less frustrated, frustrated at least with this part of the process.
And if you have any questions please leave a comment and I will try and answer it. And I have lots of other resources. You can check out my website at Montreal Financial and subscribe to my newsletter so you are kept up to date on all things accounting, finance and tax for Canadian business owners. Have a great day.
