FAQ #: 56
I wrote off sales tax that a customer did not pay, but now they have paid the sales tax. How do I show they paid it, instead of writing it off.

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. In the instance that you used the older method and the "Credit Type" to write off a sales tax amount as unpaid, and the customer later pays the sales tax, you should use the following procedure to "reverse" the write-off and then pay the sales tax amount through the normal procedure. You should not void sales tax write-off transactions, as voiding the transaction will not update the Sales Tax Jurisdiction File properly.

1. From the Cash Posting Mode Option screen, select the "Reversing Entries" option. If you are in the Cash Posting screen, you can return to the mode options by selecting "Change Mode, Date, Warehouse" from the File menu.

2. Enter the check amount for reference.

3. Leave the amount field blank.

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. This amount should be entered as a negative number, since you are not giving credit, you are "reversing" credit.

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 to be reinstated. 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 add the sales dollars from the taxable sales of the tax jurisdiction number shown and subtract the amount from 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 the be reinstated and click on "Reverse". In the credit amount field, enter the amount to be reinstated. This should be entered as a negative number. Verify the amount is correct and click on OK.

The amount of the invoice will be reinstated and the Sales Tax Jurisdiction File and the sales tax collected general ledger account updated appropriately. You can then use the normal cash posting procedures to apply payment to this invoice.