Many FP clients need to charge taxes on the services they perform or provide. Please review this article to learn how to set up taxes in your FP system. This article will review:
- Creating Individual Taxes and Tax Groups
- Associating individual Taxes to your Services and/ or Expenses
- Applying a default Tax Group to any relevant Companies
- Displaying Taxes on printouts.
Create Taxes and a Tax Group
Navigate to Admin > System Set Up > Taxes and Tax Groups.
Note that access to the Admin area, is permission based. Speak to your in-house FP system Administrator if your user permissions need to change.
You will land on the Manage Taxes and Tax Groups page. Here you will see any Taxes already set up in your system. Taxes in FP need to be organized within Tax Groups. A Tax Group can contain a single tax, or several taxes. That way, you can charge several different taxes at the same time.
Begin by creating the individual taxes. Click New Tax.
You will land on the Manage Taxes page. Required fields are marked in blue:
- Enter a Tax Name.
- Optionally enter a description for this new Tax.
- Enter the percentage rate of this Tax - ie.9.00 to apply a 9% Tax where applied.
- Tick the box to mark this Tax as Taxable. Only select "Taxable" if you are required to collect tax on one of your Taxes.
- Choose the Default Account from your Chart of Accounts that this Tax should go to.
- Optionally choose to associate this Tax to only a particular supplier/ vendor in your FP system.
Click Create New Tax when ready.
Add another new tax, or click the Associate Taxes to Tax Groups button.
You can now put any new Taxes into any current Tax Group, or create new Tax Group. For this example, let's create a New Tax Group.
Note that even if you are only charging a single tax, it will still need to be organized into a group, in order to be applied to work.
- Give the new group a name. Add a description if you wish.
- Click Create Tax Group when ready.
Now associate one of more individual Taxes to the group. Click to "Assign some Taxes."
Click the Taxes you wish to organize into this Tax Group. Click Assign/ Un-Assign to Group when ready.
Your Tax Group is now ready, and can be applied to Companies, active work and Invoices as needed.
Click Finish with Taxes % Tax Groups when ready.
Associate Individual Taxes to your Services and/ or Expenses
Once all your individual Taxes are created, you can choose which Taxes apply to which of your Services and/ or Expenses. From the Admin menu, choose Service and Expense Management > Internal (Hourly) Services.
You will land on your full list of Internal Services. From this view we can see what individual Taxes are already associate to these Services. Let's say that our service of Sketches & Roughs needed to be Washington State Tax applicable. Click on the name of the Service.
Choose the Applicable Taxes tab, and tick the box for the Tax you need. Changes will save automatically.
Back in the list view, we can see that Sketches & Roughs now has the Tax we associated. Repeat for any other listed Services.
Repeat these same steps for other Internal Expenses and External Expenses as needed.
Applying a Default Tax Group to Any Company
Now that you have Tax Groups with Taxes in them, you can choose to associate a group to any Company. When you do work for this Company, and that work includes Services or Expenses you have marked as taxable, and Invoice that work, the Taxes will be pre-selected.
Begin by finding the client company in your FP system.
From the Company page, choose the Basic Info tab and click Edit Details.
From the Tax Group field, pick your chosen group from the menu. Click Submit when ready.
The system will then give you the opportunity to enter your Tax Numbers for those individual taxes. Click Submit again whether or not you enter these numbers.
Displaying Taxes / Tax Numbers on Your Printouts
Through your Printing Preferences, you can choose to show Taxes, and Tax Numbers on several of your printouts. Please review these articles for more information as to where these options appear:
We welcome your questions or concerns: firstname.lastname@example.org