Slowly but surely getting there with loading all this info in, and trying to understand how Manager thinks. Its pretty darn smart.
To the point where I’m adding purchasing invoices for a client where I paid the tax due at the time of purchase, all these purchases were paid via retainer funds. I added a tax code for my state, I have checked the ‘Amounts are tax inclusive box’ and selected the state tax option for the line item. When it creates the invoice, the tax is not added in correctly, nor is it the correct percentage of 6%, it should be $4.20 How do I get a subtotal or grand total if you will to show on the invoice that includes the tax cost?
What am I doing wrong?
@ksh, I wonder why you are fiddling with sales tax on purchase invoices to begin with. From an accounting perspective, your expense was the cost of the accent table plus the sales tax. You should have left the Tax field blank. You are not responsible for reporting the tax to the state. Nor will you pay it to the state. The merchant you bought the table from does that accounting.
Your explanation isn’t completely clear, but I surmise you paid $69.99 for the table. At 6%, the sales tax on that purchase would have been $4.20. So the total receipt should show you paid $74.19. That is the amount you should enter, and that should have been the amount the merchant invoiced you for.
The only time you have to get involved with sales tax, either inclusive or exclusive, is if your jurisdiction requires you to add sales tax again when you invoice your customer. Jurisdictions I know about in the U. S. do not require that unless you mark up the item. In that case, you add sales tax only on the markup.
Now, all the foregoing assumes you did not buy the table at wholesale, free of sales tax. If you did that, you should not have been charged any sales tax at all, and it would be your responsibility to collect tax from the final user and remit to the state. Then, your purchase invoice would only be for the $69.99 wholesale price.
OK I sort of understand. i did pay $74.19 for table. So I will only invoice the total vs the breakdown of cost.
So when I create my sales invoices for services rendered, which is my next step, I will need to add the sales to my invoice since Maryland makes me charge the tax, then pay that tax to Maryland. So how do I so that?
Create the MD 6% tax code, which you apparently already have. Enter the service line item at whatever rate and quantity. On that invoice line, select the MD 6% tax code from the dropdown box. Manager will show the tax separately at the bottom for all items subject to that tax code. Once you have entries with the tax code applied, you will be able to create the various tax reports to see the result. And your Summary should show the tax payable as a liability, since you owe it to the state. Your income account will only show the actual amount for the service.
Here is where inclusive vs. exclusive comes into play. If you were to quote a rate inclusive of sales tax, you would check that and Manager would back the tax out, leaving the de facto service billing intact. But Maryland doesn’t allow that except for small things like snacks at a concession stand. So you show your basic charge and Manager will add the tax onto it.
One thing to be aware of is that if you have multiple tax components, Manager can handle that. For example, if the 6% were actually 3.5% for the state, 2.0% for the county, and 0.5% for the city, it could account separately as long as you set up multiple components for the code. But the reports don’t break out the separate components yet, so you would have to revert to a little algebra to figure out how much goes to each jurisdiction. That capability for separate component reporting is on the roadmap for development.
