Summary
Fieldwork's Sales Tax Reports provide detailed and summarized Sales Tax totals for custom date ranges and there are three report options to meet your needs.
If you report sales tax on 100% of invoices for taxable clients at the time the payment is received (payment date), use the Sales Tax Liability (Cash Basis) report.
If you report sales tax when the invoice is given to the client (invoice date) and your sales tax reporting is not dependent on the payment of the invoice, use the Sales Tax Liability (Accrual basis) report.
If you report sales tax when an invoice is Paid In Full and not on the invoice date nor on the payment date (paid in full date), use the Sales Tax Report Detail report.
Please confirm with your accountant to identify which report to use.
Key Points
Use the Sales Tax Liability (Cash Basis) to report Sales Tax on all monies received by payment date.
This report is best for companies that pay on a Cash Basis and do not have invoices where only part of the invoiced amount is taxable and the client is associated with a Tax Rate that is identified as [x] Service is Taxable. Tax Exempt accounts are properly reported as non-taxable on this report.Use the Sales Tax Liability (Accrual Basis) to report sales tax by invoice date.
Use the Sales Tax Report Detail report for tax
Sales Tax Liability (Cash Basis) is based on the payment date of payments applied to invoices. This accounting method report sales tax by payment date.
Sales Tax Liability (Accrual Basis) is based on the invoiced date. This accounting method reports sales tax by invoiced date.
Sales Tax Report Detail is based on the invoice paid in full date and displays both taxable and non-taxable sales within each invoice. This accounting method reports sales tax by paid in full invoice date.
Very important: The size of your company or the taxing district you operate in may have a preferred accounting method. Please confirm with your accountant or tax advisor about how to report Sales Tax.
Example:
Suppose you had a $500 invoice in August, with a sales tax rate of 10%, making the grand total $550. You receive a $300 payment in August, and the remaining $250 in September.
The Sales Tax Liability (Cash Basis) report will display the sales tax owed in August would be $30 and $20 for September, because you received more than one payment in separate months for the invoice.
The Sales Tax Liability (Accrual Basis) report will display the sales tax owed is one amount, $50 for August, because you invoiced your customer in August.
The Sales Tax Report Detail report will display the sales tax owed is $50 in September, because the invoice was paid in full in that month.
Note If you compare these reports side by side, you'll notice a difference in the total amounts unless you receive all 100% of all payments for all invoices on the same date as the invoice.
In the event you collect prepayments from customers but do not create invoices for those paid-in-advance accounts on the date you receive payment, use The Sales Tax Report Detail OR The Sales Tax Liability (Accrual Basis) reports.
Payments with Unapplied Amount report
In conjunction with the Sales Tax Liability (Cash Basis) report, we have a report for you to find unapplied payments at Reports > Payments with Unapplied Amount.
Use this report first to find and apply payments so your Sales Tax Liability (Cash Basis) report accurately reflects income when you received it.