There are many times we receive payment from a customer and they have removed sales tax, because they are tax exempt for this sale, or they have changed the sales tax amount, because the tax rate we used was incorrect. Not knowing this information on the front end creates a lot a invoices to adjust sales tax.
by: Regina D. | over a year ago | Financial Management
Comments
This could be done with scripting.
Regina, I would think in order for your monthly sales tax reports to be correct, you would still need to create the credit invoice for sales tax and just apply it to the open balance. We have streamlined our process for creating sales tax credit invoices. Instead of entering all the items from original invoice as taxable and then doing it again as non-taxable, we have a misc item code call /TAXADJ. We just create a credit memo and use this code. We add up the total taxable sales from original invoice and enter it as 1 QTY and taxable, then the 2nd line is same code, QTY 1, non-taxable. We then apply the credit memo to the open unpaid balance. This method saves a lot of data entry, especially if the original invoice had many line items on it. Also our detailed sales tax reports, show the adjustment.