DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Client asked an usual question about tax


#1

They would like to know if they can record the tax they have to pay on each sales invoice. Now I know you can do it in tax codes but they don’t want it to show on the invoice they would just like to be able to track/report how much tax they need to set aside for each invoice.
so sort of like a tax code that does not show on get added to the invoice… If it is a custom field how would I get it to add the invoice line totals and not show up on the invoice


#2

Do you mean you just want a total invoice value which will include the tax but not show it to the customer?

Why you would want to do this is a bit baffling, but it can be done using a Custom Theme


#3

in NZ we pay year end tax company tax is 33 cents in every dollar. This young couple want to put that aside in a tax account. so they would like to know how much that would be on each invoice before gst is taken out.


#4

Why would they not just calculate the amount at the end of each month/week or day using 33% of the net sales figure?

I’m not sure what the advantage of doing it on each invoice would be?

Is it a tax on Sales Turnover or on profit ?

As far as I can see the tax rates in NZ are
NZ Tax at a glance

Personal income
33% from $70,000
30%: $48,001 to $70,000
17.5%: $14,001 to $48,000
10.5%: $0 to $14,000
Company income
28%


#5

Its actually on profit when I explained that to them that this would be after all expenses they said it did not matter if the amount saved was more than what was needed.What I might do is build a excel spread sheet and get them to export the sales into it monthly and they can see from there because I can not see any other way of doing it.
I did say it was a strange request from a client Ha Ha but I thought someone might of done an equation in a custom field and I could of done it that way?


#6

You can always do a journal entry once a month to
Debit Company Tax (an expense account)
Credit Company Tax Due (liability account)

It’s it personal tax, then that would be via owners drawings or salaries


#7

I’ve never added this feature because income tax matters are typically more complicated than that. Even in your example, the tax is not on invoice. It’s on profit. What about tax-deductible expenses? That should be taken into an account too.

As a guideline, they can run P&L on a monthly or weekly basis and each month deposit 33% of their profit into special bank account.


#8

Not personal company and yes I could but they couldn’t. I will only really see their file once a year at tax time.
And they have no idea how to do that or how to calculate


#9

Yes I know Lubos I did explain that to them but they said they just wanted to cover the sales amount so it would end up being more than they need it would be a forced savings.
but it would be good to have a custom field where we could put an equation in


#10

How do I get a report for cash account receive money


#11

What kind of report? What information do you want in the report?


#12

I found it and exported it to excel but it would be nice if it did not export accounts with 0 amounts


#13

Do they or you get access to monthly bank statements, if yes, then they transfer 33% of deposits, balance permitting. This would be a better basis then being Sales Invoice orientated due to the possible lag between invoicing and receiving payment.

Invoicing 10,000 in the month but the bank account not having 3,300 to transfer.


#14

I am not sure yet I think I will be doing it yearly. They are not gst registered and for a minute I thought I could use the tax rate but it has to show in the sales invoice you can not hide it


#15

I am going to get them to use the cash account tab . what happens if I down load the bank statement after the cash account has had receive money and spend money.
Maybe my cash account tab idea wont work


#16

What do you mean by this, that they will (a) allocate the cash account receive / spend money transactions to the respective customers/suppliers etc. or (b) that they will just record the receive / spend without any allocation. If (a), then it can work but if its (b) then it can’t.


#17

@Wornout, if you already have not, you need to abandon any idea of using a tax code, hidden or otherwise, for your purpose. Depending on whether marked as tax-exclusive or tax-inclusive, tax codes will always affect Accounts receivable or whatever income account is selected. If tax-exclusive, the customer is going to be asked to pay more. If tax-inclusive, income will be wrongly reduced.

Setting aside money to pay future income taxes is not an accounting transaction related to income or receipts. It is a management decision to move a cash asset from one pocket (account) to another. No money enters or leaves the business, and liabilities to tax authorities are affected.

As others have pointed out, there are many ways of using information in Manager to decide what amount to set aside, none of them directly related to recording of receipts.


#18

Hi Brucanna,
As they are doing a lot of cash sales I was just going to get them in receive money goes to sales and spend money goes to the various expenses account. Is this not what it is for? I haven’t used it before so was thinking thats what it was used for


#19

Yes Tut I know this I did try and explain but as I explained they are a young couple who don’t understand . So I have done a spread sheet that will do it for them and have written down some basics of accounting so they can understand and will spend an hour or 2 with them trying to get them to understand. It wasn’t a major it was just a request from them and I strongly encouraged them to use manager saying it could do everything they needed it to do with out the cost and how user friendly it is, even for a new start up.So I was showing them and they asked me if it could and I said I don’t think so but will ask because manager has a really good support system.
Hence to say they are going with manager :rofl:


#20

Yes, but that post was asking /answering in relation to your next comment “what happens if I down load the bank statement after the cash account has had receive money and spend money”.

So to clarify - If (a), then it can work “with downloaded bank statements” but if its (b) then it can’t. Your additional post seems to indicate that it will be (a).