As long as you enable tax calculation and select AvaTax as the tax calculation method in your accounting software, AvaTax automatically calculates a sales or use tax rate on a variety of transaction types according to the taxability rules of those products (exempt customers aren't charged sales tax). Some of the transaction types AvaTax calculates tax for are:
- Orders/invoices/cash sales
- Return authorizations/credit memos/cash refunds
When you create one of these transaction types in your accounting software, AvaTax uses the customer's ship-to address to calculate the correct sales tax.
If you're applying discounts, remember:
- A header-level discount is applied to all taxable items in the transaction
- A line-level discount is applied to the item above the discount row
- If both a header-level and a line-level discount are applied, their cumulative discount is applied to the line item
Calculate tax on a document
To calculate sales tax on a document in QuickBooks Online, follow these steps:
- Create the document and add all the relevant details.
- To ship the items, add the Billing address, Shipping address, Ship via, Shipping date, and Tracking no. details. Type the shipping charges in the field next to Shipping. The shipping charges are considered as a new line item and assigned the tax code as FR.
- To enable tax calculation for an item, select the Tax field for that line. If the Tax field for a line is not selected, then the item is considered as non-taxable and the corresponding tax code sent is NT.
- To add a discount, select one of the following options from the list and type the numeric value in the neighboring field.
- Discount Value: This is the actual discount amount. Select this option to ensure that the discount is considered for the real-time tax calculation.
- Discount Percentage: This is the discount percentage. If you select this option, the discount and tax is calculated at the backend and updated in the document after a delay of approximately 2 minutes.
- To add a new line item, click Add lines.
- To remove all line items, click Clear all lines.
- To add a subtotal item, click Add subtotal. While calculating sales tax, AvaTax does not consider a subtotal item. You can add a subtotal item only to invoices and estimate transactions.
- To calculate tax, add the relevant details and click one of the following:
- Estimate Tax: Calculates the sales tax for this document and adds a new line displaying the sales tax. These details are not sent to the Admin Console.
- Save: Saves the document, calculates tax, and adds a new line displaying the sales tax, and sends the details to the Admin Console.
- Save and Send: Saves the document. After the document is saved, AvaTax for QuickBooks Online calculates the sales tax and sends the details to the Admin Console.
For transactions with a Delay Charges line item, click Save to calculate sales tax instead of Save and Close or Save and Send.
Schedule a document (recurring invoice)
To schedule a document (recurring invoice) in QuickBooks Online, follow these steps:
- In QuickBooks Online, click your user name and go to Lists > Recurring Transactions.
- To schedule a recurring document, click New.
- In the Select Transaction Type window, select the Transaction Type from the list and then click Ok.
- In the Recurring Invoice window, add all the relevant details. Click Save template to save this document as a recurring invoice template.
- Template name: Name for the recurring document template.
- Type: Select Scheduled.
- Create _ days in advance: Type the number of days in advance you want to create the recurring document.
- Customer: Name of the customer.
- Email: Email address for communicating the status.
- Options: Option for sending details in the email.
- Automatically send emails
- Include unbilled changes
- Online Payment: To set the option for online payment, click Sign up to let your customers pay online.
- Interval: Periodicity of the recurring document.
- Start date and End: Period during which this recurring document is generated at the above mentioned interval.
- Billing address, Shipping address, Ship via, Shipping date, Tracking no.: Details for shipping the items.
- Discount: If applicable.
The recurring document is generated as scheduled and a status email is sent to the registered customer.
Void a document
To void a document in QuickBooks Online, follow these steps:
- Open the document.
- To void this document, click More > Void. If the void operation is successful, the message "Transaction successfully voided" is displayed. Click Ok.
- In Admin Console, the Doc Status for this document will now be displayed as Voided.
Delete a document
To delete a document in QuickBooks Online, follow these steps:
- Open the document.
- To delete this document, click More > Delete. If the delete operation is successful, the message "Are you sure you want to delete this?" is displayed. Click Yes.
- The document is deleted from QuickBooks Online and is not displayed in the Admin Console.