As a small accounting practice, I use billable time to record times on client work, during the month. The charge out rate is standard, and is picked up at the correct amount in the billable time process.
These billable times are then converted to sales invoices at the end of the week, or month.
I notice that the invoice shows the resultant hours and charge out rates correctly, but it picks up each line item as non taxable. There does not seem to be a link in the billable time module to identify a charge out rate as taxable, which can then flow over to the invoicing module.
There is an elevated chance of an invoice being sent out without GST being charged on it, unless this aspect is checked.
Currently, I get around the problem by re-visiting each line on the sales invoice and changing the tax field to taxable, before finally processing the invoice. This seems cumbersome, especially considering that the information on charge out rates and taxable status is already contained in Manager in the Non Inventory items module.
Is there a way that this can be remedied?
Very easy. Edit the Billable time - invoiced account definition under Chart of Accounts in the Settings tab. Select the tax code you want to apply to billable time. Whenever an invoice is created from the uninvoiced amount in the Customers tab, the assigned tax code will be applied. (This could be manually edited if you ever have non-taxable billable time on an invoice.)
Note, you will not see tax when looking at the entries in the Billable Time tab, because the tax is applied only during the act of invoicing. This is because your recording of time is not the taxable event. Your invoicing of it is. Until you invoice, the billable time is an asset, much like inventory, lodged in the Billable time asset account.
Many thanks Tut. A simple solution which works.
I am enjoying using Manager for my accounting requirements. Works well for me.
Following this procedure of editing the
Billable time - invoiced account to assign a tax code is good until you have to bill a different tax for a different customer. How do i make manager pick a different account for invoicing the billable time of the other customer?
You just need to edit the sales invoice by choosing a different tax code for applicable line items.
Thank you. I was afraid of this answer, its not ideal as its manual and there will be 30 lines. I guess i’ll try seeing if i can script something to automate it
Have you considered using non-inventory items instead of billable time? That would let you assign both custom income accounts and non-standard tax codes. The attractiveness of this option will depend on how important the time-keeping aspect of the billable time function is to you, including whether you have other records of time spent.
I was unsure whether or not i should keep time tracking in manager for compliance. I already use a third-party tool to track time and therefore i could simply create the invoice with one line item of the total hours.
I see no point in doing things twice. If you are already using a third-party time clock or timekeeping app, I would definitely recommend setting up a non-inventory item for billing. Put your alternate tax code into its definition.
As for compliance, that would depend on local regulations. I have never worked anywhere that required timekeeping to be integrated with the main accounting system. In my experience, that is seldom done. There are time clocks, paper time sheets, independent computer apps, and so forth. Even the ability to integrate timekeeping with accounting in a computer-based application is a relatively recent development in the history of accounting.