Finance Tutorial

Tax Management

Taxes

You can maintain taxes for multiple location and across states. For every tax there are two categories – Sales tax and Labor tax. You can associate the tax selection to a customer and this will be automatically reflected on your work order and proposals items (Service, Labor or Items). You can also change the tax category on different work orders. We run reports on Taxes and Sales tax for your periodical analysis.

Taxes

By default if you have one tax please set it up in the Company Detail.

If you have multiple tax then please setup in the Tax Setup. Check the Load Tax Based on City & Zip if you want to load tax automatically based on your service address location. Read more about this on Automatic Tax Selection.

Create Tax

  1. Enter Tax Code: This is a short code for your tax
  2. Tax Name: This is the detailed name of the Tax setting. Generally people use the name of the county or city to define this name e.g. Wood County with tax code of Wood.
  3. City: The name of the city for which this tax is applicable
  4. State: Name of state where this tax is applicable
  5. County: Name of county where this tax is applicable
  6. Tax Category: By default we have Federal, State , City, County and Special tax defined. US Customers can easily use these predefined category. If you are in other country, you can rename these tax category to suit your need.
  7. Default: If the default is checked, this tax will be automatically selected if you have opted not to use tax based on city & zip or if matching tax code is not found

Tax Breakdown

You can rename the tax on how you want to display in the invoice. This is especially helpful for Canadian customers where you want to show multiple tax for the invoice like GST/PST etc.

Go to Tax Configuration.

Rename the tax name by clicking the edit icon and save. Enter the appropriate percentage value for these tax definitions.

Go To Invoice Template. You will find these dynamic legends of the tax is added to your invoice. Keep in mind if you change the name of the tax after setting your invoice, make sure to pull the right legend name and update the template.

Automatic Tax Selection

Last but not the least, we have added smart selection of Tax code based on the zip code of the Customer.

Now when you create a job and add a customer of Denver Zip Code it will automatically update the tax code to Denver tax.

If you change the zipcode to california, it will auto change the tax code. The zip code of Address Type Customer Address is the one that is considered for determining the tax code.

So if you have two address, one billing in California and customer address in Denver, then the tax code will reflect Denver tax.

Tax Exempt

You can set your customer as Tax exempt by checking the Tax Exempt checkbox on the right. When you check this the tax will automatically not applied.

Tax Reports

You can find the following reports under the Reports menu.

  1. Sales Tax
  2. Sales Tax Report for Delivered Items
  3. Tax Report
  4. Ticket Financial Report

FAQ

Where does labor or Sales tax apply?

Labor tax is applied to service/labor charge that you define in Service Items/ Price List.. Sales tax is applied to Parts/Items that is defined in the Inventory or Other Charges defined in Invoice Charges.

You need to define your labor Charge/ sales tax in the Tax Setup as mentioned before for it to show up in the Charges. The example below is a exaggerated definition of tax to explain better, The sales tax is setup as 30% and Labor tax as 10%.

How do I partly apply tax to some items?

You need to just unselect the items or service items that doesn’t need to have tax applied. The Charge will show the correct and partial tax.

Can I change Tax Code on a job?

Yes you can change the tax code for a current job from what is by default for this customer. However it will prompt you and ask if you want the default tax of this customer to be the newly selected one.

If you say yes, the tax for this customer will be updated.