When receipting a payment from a customer for an invoice which includes a tax element under ledger code accounts receivable I have to remember to flag the tax box. Is it possible to have this default to our GST rate?
No, because your procedure, as described, is wrong.
If a customer is paying a sales invoice, the receipt should be posted to Accounts receivable => Customer => Invoice. No tax code is required. The tax code was applied on the sales invoice and was credited to Tax payable then. The receipt against the sales invoice merely fulfills the account receivable. It does not record additional tax liability any more than it records additional revenue.
The reason the tax code field is visible is that the receipt form is sometimes used for cash sales where there was no sales invoice involved. Then, you would choose the appropriate tax code. Both income and tax would be recorded directly from the receipt in that case.
Default tax codes can be set for inventory and non-inventory items so you don’t forget them. But they are applied line item by line item, not on a broad basis for everything the company sells. The risks are too great that you forget to remove a tax code for a tax-exempt item or customer and end up paying the government too much.
Thank you for this information Tut, I have been receipting correctly but
checking the visible tax box to show our GST rate, will this be causing any
issues? I have everything correct as far as having the default tax code set
for non-inventory & inventory items and my invoicing is correct with the
tax applied line by line.
Yes. Because you have been telling the program that part of the money received should be allocated to the Tax payable account. Look at the various tax reports. You’ll see that your tax records are seriously wrong. Basically, if you issue a sales invoice and apply a tax code, then apply the same tax code on a receipt, you’d be double counting the taxes. (The amounts would be slightly different because in one case it will be a tax-exclusive transaction, in the other a tax-inclusive one.)
I believe this is a problem that I am encountering during my upgrade from V15 to V18. The procedure/form fields for receipting payment for a sales invoice in V15 were seemingly automatic in selecting the accounts receivable and not having a tax field available for selection, however the new V18 is a little less automatic (harder for me as a non accountant). I can clearly see that taxes are wrong if I double select tax (as described above in this thread). It seems I need to retrospectively fix old records after upgrade though.
Sorry to jump on old thread. Just trying to nut out my upgrade troubles. Thanks
You seem be offering comments. Do you have a specific question?