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Balance Tax Before Posting and Errors to Look for
- Hilary Hawkins (Deactivated)
- Kai Andras
You are required to make sure your transactions are correctly flagged for VAT or GST to ensure an accurate VAT or GST calculation.
Tax Balance Setup
Enabling the Balance Tax Before Posting option will prevent you from posting a transaction until your tax balances. If you attempt to post a transaction and the tax does not balance, the system will prevent you from posting until it is corrected. By default, all databases have this turned on by default to ensure correct tax calculations.
Turn on the Balance Tax Before Posting option under the Eclipse System Defaults, along with inputting a Tax Balance Threshold of 0.20 to coincide with the VAT percentage @ 20%, GST percentage @ 10%, etc.
To minimise the errors you receive when posting items, ensure you have the Auto Create and Balance Tax Lines option here: https://tphglobal.atlassian.net/wiki/spaces/TPHCS/pages/1700987432
Checking the Tax Balance of an entire Batch
Each of the data entry modules - Invoices, Petty Cash, Journals and POs - have a button to check if the tax balances for all the entries in the entire batch. If the tax for any of the entries does not balance, then the system will notify you of which entry in the batch needs to be changed for you to be able to post the batch.
Error Messages
If you are receiving an error message that your tax does not balance you must check the following:
- 1
- 2 1. Are your transaction lines correctly flagged with the VAT or GST tax flags?
- 3 2. Does your tax line exist?
- 4 3. Is your tax account line correctly flagged with the tax code?
- 5 4. Are your net amounts (distribution lines) correctly flagged with the Tax Code?
- 6 4. Is your Tax account that is setup in Control Table → Indirect Tax Codes the same as the tax account you have coded your transaction line to? If it is not, you will get a tax balance error.
- 7 6. If you are coding a transaction to a different tax account than the one setup in your Control Table -> Indirect Tax Codes list and you do not want to change this current tax account you can change the account type in the Chart of Accounts to the tax flag you are posting to, such as V or G.
- 8 7. Do you have any Chart of Accounts with the same account type as the tax flag you are posting to?
1. Are your transaction lines correctly flagged with the VAT or GST tax flags?
If you have items flagged for Tax you MUST have stand alone tax line that is:
flagged with the Tax Code
and is pointing to your Tax Account.
This applies to all data entry inside Eclipse - Invoices, Petty Cash and Journals.
2. Does your tax line exist?
The example is using a 10% tax rate with the tax flag G at. The total amount is $100 with a 10% tax, so the net is $90.91 and the tax amount is $9.09.
The below Invoice will throw a tax balance error because it is only one line and is missing the tax account line.
The invoice below is the corrected one, it is split between the distribution and the tax line, and both the Net amount and Tax amount are flagged with the same Tax Code, G.
3. Is your tax account line correctly flagged with the tax code?
If your tax flag is missing from the Tax Account line, your transaction will fail the tax balance.
The system is trying to balance the tax lines G in the below example. It has found the distribution of $90.91 but it cannot find the tax of 10% ($9.09) on $90.91 because it is not flagged with the same tax flag G.
4. Are your net amounts (distribution lines) correctly flagged with the Tax Code?
If your net amounts are missing the tax flag, your transaction will fail the tax balance.
The system will try to calculate the net of all transactions with a Tax flag. If it does not exist or is incorrect, the system will not be able to balance the tax correctly.
In the below example, the tax amount of $9.09 is correctly flagged with the Tax flag G. The system is trying to find the Net of this tax flag ($90.91)
4. Is your Tax account that is setup in Control Table → Indirect Tax Codes the same as the tax account you have coded your transaction line to? If it is not, you will get a tax balance error.
Coding your tax line to a different account then what your system is setup as under Control Table → Indirect Tax Codes will throw a tax balance error.
In this example we have coded the G Tax line to 200.01. The system is looking for account 600.01 that is set-up under G for Indirect Tax Codes.
Because the transaction line does not match the G Tax flag account setup under the Control Table → Indirect Tax Codes it will not balance and will throw an error.
You will need to change the tax line to the correct account in your Indirect Tax Codes OR in your transaction you are posting.
6. If you are coding a transaction to a different tax account than the one setup in your Control Table -> Indirect Tax Codes list and you do not want to change this current tax account you can change the account type in the Chart of Accounts to the tax flag you are posting to, such as V or G.
This is commonly used when you are posting a transaction into a past or future tax account and you do not want to change the current tax account.
The tax balance feature will then look at the range of tax accounts with this flag, instead of just the one account setup in Control Table → Indirect Tax Codes.
This will allow you to have multiple tax accounts setup that are compatible with the Tax Balance calculation without needing to change the Indirect Tax Code every time.
In order for this to work, please ensure you have turned on the Use Chart Type as Tax Code option in the System Defaults. See: https://tphglobal.atlassian.net/wiki/spaces/TPHCS/pages/1700954115/Eclipse+-+System+Defaults#Tax-Balance
7. Do you have any Chart of Accounts with the same account type as the tax flag you are posting to?
The tax balance feature will look at the range of accounts with this type flag, instead of just the one tax account setup in Control Table → Indirect Tax Codes.
For example, you are flagging a transaction with the E tax code, but you are getting a tax balance error when trying to post.
You can see if you have any chart of accounts setup with the same account type as your tax flag by going into the General Ledger → Chart of Accounts module and sorting by 'Type'.
In this example, we have one account with the same flag as the tax flag. The system is trying to balance the tax against this account and failing.
To fix, you need to change the Account Type to a different flag from the tax flag. For example E should be changed to EX.
If you wish to turn off this functionality - please turn off the Use Chart Type as Tax Code option in the System Defaults. See: https://tphglobal.atlassian.net/wiki/spaces/TPHCS/pages/1700954115/Eclipse+-+System+Defaults#Tax-Balance