How do I set up Taxes and Adjustments?

In some jurisdictions, there may be one or more tax(es) that may appear on invoices or needs to be applied to the cost of an item when purchasing. To facilitate this, taxes need to be entered into the system to appear in Purchases and Reports. Adjustments are also required and include anything that affects the final cost or is applied to an invoice as some sort of percentage or value (e.g. deposit fees, discounts, environmental fees, etc.)

To Add, Delete, or Edit a Tax or Adjustment

  1. Click "Settings" (upper left corner)
  2. Choose "Setup"
  3. Select "Taxes & Adjustments"
  4. Select an existing tax/adjustment to edit or click "Delete". To create a new tax/adjustment, click "Add".
  5. Enter the information as follows.
  6. Click "Save"
Field Details
Code Enter in the code for the tax (e.g. TAX, PST, etc.)
Description Enter a description (e.g. Sales Tax, Deposit, Margin, Discount, etc.)
Recoverable? Indicate if this is a recoverable tax. This is a tax that is applied as part of your purchases but will receive back as a credit from your tax agency.
Percentage or Value Choose either percentage or value from the list. Some taxes or adjustments are a fixed amount and some can be a percentage calculation. We recommend to choose an amount as this can be edited within an invoice.
Amount or Percentage Indicate the amount (by currency) or the percentage, if percentage chosen.

Enter the account that the tax is applied to in your Chart of Accounts (COA)

Ex. Goods and Services Tax (GST) amounts get posted to the Sales Tax Account, keg deposits get posted to the Beer Deposit account, etc.

Apply Purchase Amounts to Item Accounts

In some instances, you may wish to apply the tax amount calculated to an item and update the amount to the purchased item rather than to the tax account. 

Ex. you can choose to add the cost of the tax applied to a cleaning supply to the Cleaning Supply Account rather than the normally assigned account.