Adjusting Sales Tax on Existing Invoices
The following process provides a detailed record of the reversal of sales tax. The process may seem a bit cumbersome, but once understood, it provides a detailed account of the credit process and provides the customer with a clear record of the correction. The same process can be used to tax a customer that was not originally taxed. Simply credit the customer the non-taxed item and then invoice them the taxed item, thus creating an invoice for the amount of the tax.
If a customer is incorrectly invoiced (or not) for tax, the best way to correct the problem is as follows:
1. Below is the original invoice created for the customer with the customer selected as a taxed customer.
Within the customer's ledger, the resulting invoice appears for the amount of the purchase plus the assessed sales tax.
2. The customer's sales tax status is changed within AR | Customer File | Accounting to the "Non-Taxable" status.
3. Return to POS and create a new invoice to refund each item which was incorrectly taxed.
Make note of the change in the tax status of the refunded items.
In this example, upon entering the Ring Sale screen, select Change Customer and select the appropriate customer.
4. Next, select Refund (Sh+F2) to refund the originally purchased item(s). Select Refund Next Item and enter the item that was incorrectly taxed.
5. When you enter an item number after selecting Refund Next Item, the Invoiced Item Selection screen will appear, showing the entered item on recent invoices. If the invoice is not listed, change the date range in the bottom left. Select the correct invoice. When asked for the refund reason, select to return to inventory.
6. Change the tax status of the item(s) to "Taxable" (or non-taxable) using the Modify Tax (F5) button since the customer is not the same tax type as they were when the invoice was created. This will create the correct tax credit amount for the customer.
When choosing the tax type to modify, click All Items to ensure the new tax type is changed on all.
7. Next, reenter the same item(s) again as a normal sale item.
The resulting invoice will have the appropriate tax credit for the customer. Complete the sale by selecting End Sale (F2) and then select the appropriate payment type.
Reviewing the sample customer's account, the appropriate credit is posted to the customer ledger.
