What is ServiceTitan's best practice for Sales Tax on materials purchased and entered in the Pricebook

Contributor III

I buy a $1 widget from a vendor.

The Government charged $.08 tax on that widget

My actual widget cost is $1.08.

In the material section of the pricebook do I enter $1 or $1.08?

When I enter $1 the job costing on my invoices is wrong.

When I enter $1.08 I can't compare my vendor's bill to the material I have in ServiceTitan without doing math in my head to adjust for the Tax. (This seem really really wrong)


Contributor III

This is a big issue and rich_tim's suggestion won't work because both GAAP and IRS regulations require that items purchased for inventory or job usage be costed at landed cost, (in other words, sales tax and freight should be in the purchased items cost, not expensed).  With respect to blutz's original point, the correct item cost is 1.08.  Yes that does make it harder to compare bills to PO's at the line item level, but the totals should match.  A suggested solution for this has been put in the ideas section on point COMMUNITY-I-879.  If you are still having problems with this, and I am sure you are, upvote that change request.

Mike M CPA & Operations in KC, (go Chiefs)

New Contributor III

Here is a suggestion which is based on exporting from ST out to QuickBooks: Put the cost including tax into the Materials/Equipment list (job cost will be correct). When the Vendor Bill is generated, edit that Vendor Bill in QB when you receive the actual invoice from the vendor and split out the sales tax so that it is expensed. You shouldn't have to deal with the sales tax on each item in the vendor bill-- just the total tax. In the QuickBooks item list, the affected items should be mapped to an inventory asset account and the "Cost" listed there should be the cost without sales tax, which will be expensed whenever that item is "sold". (i.e. assuming you don't want to carry the cost of sales tax in your inventory). If I understand Service Titan correctly, the "Cost" in the PriceBook will be over-ridden by what is recorded in the QB item list as the transaction is exported into QB. I am not a CPA but I believe this suggestion will keep the books accurate and the ST Job Cost accurate as well..

Contributor III

@Ben Platt?

I received the answer and it is not awesome . .

Inventory, purchasing & replenishment are not currently comparable with job costing if there is sales tax applied to the materials being purchased.

There is no way to see the sales tax in job costing unless it is added to the materials & Equipment before going into the pricebook.

For purching and replenishment to work tax is apparently separately.

This is a big issue for me because I m working on my pricebook so I can do both material replenishment & job costing. 

New Contributor II

Hi @William Lutz? !

Please submit this question to our Customer Support Team with an example of an invoice where you've attempted to calculate it correctly and we'd be happy to dive into your workflow to determine the best practice for how you should enter that sales tax moving forward. 