FAQ #: 54
How do I "write-off" unpaid sales tax from a customer's account.

Cash Posting includes an option to adjust sales tax. To adjust the sales tax, right click on the invoice and choose Adjust Sales Tax on Invoice, and in this window the user can change the Taxable flag and the Tax Jurisdiction # as well as adjust taxable and nontaxable sales manually if desired. When you do this, it will adjust the Tax Jurisdiction Report and it will also update the actual invoice to reflect the changes, so you can re-print an invoice and have the tax changes reflected on the re-print. The following steps are the original method that had to be used for making a sales tax write-off, and they can still be used to write-off or give credit for sales tax that a customer has not paid on an invoice if desired. This method updates the Tax Jurisdiction Report, but it does not reflect any change on the actual invoice itself.

1. Enter the check number.

2. Enter the amount of the check, even if the check is less than the invoice(s) being paid.

3. Enter any cash discount(s) amount that the customer is using.

4. From the "Credit Type" select the sales tax write-off type. You must use a type that contains the word "tax" in order for the system to recognize that you are performing a sales tax write-off and update the Sales Tax Jurisdiction File appropriately.

5. Enter the amount of the credit (ie. the amount of sales tax they did not pay) in the "Credit Amount" field.

6. The system will use the amount in the "Credit Amount" field, and the sales tax jurisdiction number for this customer to determine the amount of sales dollars the customer did not pay sales tax for. The customers tax jurisdiction number and warehouse will be displayed, along with the amount of sales dollars. You may change the customers tax jurisdiction or warehouse if necessary. Understand that the system is going to subtract the sales dollars from the taxable sales of the tax jurisdiction number shown and add the amount to the non-taxable sales of the tax jurisdiction. This number should not be changed unless necessary. Also, the amount of sales dollars can be changed, but you should consider that changing this amount could throw the sales tax jurisdiction report out of balance with the general ledger for sales tax collected.

7. The general ledger number will default to the sales tax collected account and can be changed if necessary.

8. Highlight the invoice to which the credit should be applied. Click on the "Override" button. Click on the "Apply Credit" button and the available amount of credit will be defaulted into the credit amount field. If this amount is correct, and the payment amount and/or discount amounts are correct, click on OK. You may edit these amounts if desired.

As mentioned above, the system will figure the amount of sales dollars that corresponds to the sales tax credit amount. This sales dollars amount will be subtracted from the customers tax jurisdiction taxable sales amount and added to the non-taxable sales amount. The credit amount will be used to make a correcting entry to the sales tax collected general ledger account.