Tax payable account allocation


How to allocate a different account for any new tax created.


This is not currently supported. But is this something that would be useful? I mean there are many tax reports under Reports tab which will show you breakdown by tax code.


Here in the United States, more and more we are required to pay sales tax to each individual state where we make sales. Each state requires us to fill out a form that shows total sales to that state and non-taxable sales to that state (total sales - non-taxable = taxable sales for paying). Each state may have a different sales tax % and, in my case, some states do not require me to pay them monthly. Having separate accounts for each of them would be really helpful!

A related question - as I am setting up my company, I Found the Tax Payable account but didn’t seem to be able to attach any additional accounts to it. So - I created a Taxes Owed control account in Liabilities and set various states under that as well as setting the tax codes to those new accounts I made. This will do the trick for me but I still have that Taxes Payable account showing since it can’t be deleted. I’d really like it to go away since it will never be used - or at least that’s my assumption with the tax codes attached to different accounts. Have I done the whole thing wrong?

Lastly, Northwinds didn’t seem to have any tax reports in it so I don’t know if Manager will do this. As I said in the first paragraph, I have to give total sales per state (Exempt + Taxable). Is there a report that will allow me to figure this out or will I need to keep manual track of all my sales in Excel on a state by state basis? There doesn’t seem to be an option to show both a state tax code and list the sale as exempt (we work with Churches and schools often and here in the U.S they are generally tax exempt but still need to be reported on sales tax forms).



@KrisK, you have asked an awful lot of questions in one post. Please, in the future, one question per post.

Yes, it would. And that is your responsibility to set up. Sales tax accounting is really complex and requires a lot of tax codes and, potentially, specially created liability accounts.

That’s right. But your solution was overly complex and won’t work correctly, I don’t think. You did not need the control account. Instead, just create accounts for the various tax jurisdictions and assign custom tax codes to them. This is discussed in this Guide in the context of multi-component tax codes.

Correct. The tax functions are hard-coded to pass through that account, so it remains, even though it might always be empty.

Tax reports only appear after tax codes are created. As you can see in the Guide linked to above, once the custom tax codes are properly defined and used, the sales should show up for each. But you’re going to have a problem. Sales taxes are not built into Manager. Each one must be a separate custom code. And it won’t be just for 50 states. You’re going to discover, now that this enforcement regime has gone into effect, that every county, city, and special tax district is going to want to get in on the action, too. There are thousands of potential combinations (50 states, DC, 3142 counties, who knows how many cities and special districts). You’re eventually going to need a tax rate lookup application that works by street address (even zip code won’t do it). And many of those jurisdictions are going to demand a sales tax license before you can enter the game, telling you it is illegal to sell to anyone in the jurisdiction without the license.

Almost all your tax codes are going to be multi-component. And, based on your comments, you’re going to need even more codes for tax exempt statuses. Some organizations will be completely exempt, but some may be exempt from one component, but not another. Others may be exempt for everything they purchase, others only for certain categories. This will be an implementation nightmare.

As the Guide says, Manager unfortunately cannot handle separation of multi-component codes for reporting purposes. So there will still be manual work to separate state from county from city tax remittances.

I raised these issues with @lubos years ago. At that time, he made vague comments about future improvements, but there has been no action. I really think what is needed is a checkbox or table structure in which a large number of tax components can be stored; then, on an invoice, a user would check those that applied to a particular line item. Scary, eh? I see only two situations in which Manager is truly convenient for someone in a sales tax regime: you either sell non-taxable services, which is a fairly common situation in the USA, or you sell and deliver all goods in a single tax jurisdiction.


OK - I’ve played around a bit and am going to rely on reports to tell me what are exempt and what are taxed for each state rather than the summary and chart of accounts telling me. Not exactly what I want but it seems it will (or should) work within Manager’s structure.

I would like to request a simple ‘apply to all’ box at the bottom of the invoice so I could simply choose taxable or exempt and the state and it would populate all the items on the invoice. Keeps me from spending quite so much time choosing items while doing a sales invoice.

BUT - now I have a problem. I went back to using the Tax Payable account that is hard-wired into the program (although I renamed it Sales Tax Payable). I have my tax codes set up and they use the tax payable account (greyed out but in the account field). I just entered some sales from the beginning of this year and now find that any sales tax I collected is listed in the Suspense account and not in tax payable. I checked the transactions and I definitely had the tax code chosen correctly for those sales. So - there doesn’t seem to be a way for me to get them out of suspense and into the tax payable account. How can I correct this?


Look at your custom tax code definitions. That is where the account to which the tax is posted is set.

But your description is puzzling. The default account is Tax payable, not Suspense. Can you post the following screen shots:

  • A sales invoice or receipt on which you charged sales tax. Show the Edit screen. You can obscure proprietary information.
  • The custom tax code Edit screen for the tax code applied on the above transaction.


And just for kicks - here’s a shot of my Summary page. I had changed the name of Tax Payable back from Sales Tax Payable, just in case that made a difference although I know it shouldn’t. You can see that Tax Payable only has $3.13 in it (that’s a starting balance) and that Suspense has a amount which includes all the invoice I’ve entered for this month that had sales tax charged.


Your problem may be that your tax code is assigned to_Tax payable_. The account showing in your Summary is Tax Payable. (Note the capitalization difference.) These may not be the same accounts. _Tax payable (lower case p) is the hard-coded account, but you may have deleted it. I mistakenly did the same thing when I first started using Manager years ago.

To find out, go to Settings > Chart of Accounts. If the capitalization difference is just due to your editing of the name, it will look like this:


If that’s what you see, that isn’t the problem. (I actually think this is not your problem, but exploring it has revealed a bug I will report separately.) If you see something else, let me know.

Assuming that isn’t the problem, can you post a screen shot of what you see by drilling down on the 101.71 balance for Suspense? Then also post a screen shot of one of the transactions in the list that appears.

Three questions: (1) What start date did you enter? (2) Are you using accrual or cash basis accounting? (3) Since your Accounts receivable balance is greater than your sales, how did you enter your starting balance for that account, and are any of the pre-start-date invoices involved in your confusion over sales taxes? (If the pre-start-date invoices included sales tax, that will not be reflected on your Summary. That sales tax applies to a prior accounting period. Pre-start-date invoices do not affect inventory item balances, taxes, or anything besides Accounts receivable balance.)

You have other problems, too. Starting balance equity is an automatic account Manager creates to force your books to balance (Assets = Liabilities + Equity). It should always have a zero balance. The fact that it does not means your starting balances were not correctly entered. They were unbalanced. Frequently, this reveals an error in capital account setup. Fixed assets are also likely culprits.


The Tax payable account in the chart of accounts shows as ‘Tax payable’ and shows I’ve changed it to Tax Payable so it should be okay.

I’m using 1-1-2019 as the start date. Accrual accounting. The Accounts Receivable starting balance came from credits and outstanding invoices from 2018 and would not have any sales tax issues - I simply entered an ‘Invoice’ that showed the total owed. that $3.13 in Tax Payable is the starting balance owed as of Jan. 1 for the Dec. sales not yet paid to the state of Indiana.

I wondered about the Starting Balance Equity amount as well. Fixed asset starting balances match exactly with my previous accounting program balance sheet. I’ll recheck my Retained Earnings from the end of 2018 - I entered it where I thought it should go but perhaps there’s an issue with it.

Let me know if I need to delete and completely re-enter at least my taxable sales for this year so far (if you think that would help). I’m really concerned that it isn’t working properly and don’t want to jump into this firmly if it’s going to not work.



Oops - forgot to add the suspense account drill down. The first transaction (3 items) is the same invoice I uploaded above.


How did you enter those? Make sure you followed the Guide: And be aware that Manager will automatically apply credits to subsequent sales invoices.

I think there is. Notice that Retained earnings equals your net profit. That means there was no starting balance. It is just the net of income less cost of goods. So if you migrated retained earnings from your previous program, you did it incorrectly.

Try that with one sales invoice. I’ve replicated your entries in a test company and cannot reproduce this problem. Meanwhile, it looks like all your entries were correct. So maybe some bits flipped somewhere.

I would delete and re-enter the tax code definition first. Be advised, however; that will require that you first delete the sales invoices that use it. So you may want to create a replacement tax code first, then switch the tax codes on the existing invoices to the replacement. If that alone does not fix the problem, start with re-entering a sales invoice. (When you are all done, you can rename the replacement tax code to whatever you want.)


So - I created a new tax code, changed the invoices in question, and the tax payable showed up where it was supposed to - no suspense items. WooHoo!