Reconcile your sales tax payable account
- Identify the balance of your account at the beginning of the accounting period.
- Add the total amount billed to customers.
- Subtract the total sales and use tax paid, either electronically or by check, before timely filing discount.
- Reconcile this amount with the current balance of your sales tax payable account.
- Re-class any discount or rounding balances to the proper general ledger account
(Sales Tax Bill Total) + (Beginning Account Balance) – (Total Checks Paying Sales Tax) = (Source Document Balance). Reconcile this amount with your current sales tax payable account balance.
Be sure to check back with us for additional sales tax tips for your small business in 2012.
More Sales Tax Tips