Efficient Tax Calculation on Previous Amounts in Empress

Guides & Tutorials
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Introduction

Welcome to this simple, user-friendly guide designed to help you navigate the world of tax calculations in Empress. We understand that tax calculations can often be complex, especially when you need to calculate tax on a previous tax amount instead of the item amount. This guide will break down the process into easy-to-follow steps, allowing you to get the most out of Empress’ powerful features.

Why is this important?

In a business setting, there may be situations where you need to calculate a tax on a service charge that was itself calculated on the net total of your items. For instance, you might have five items with a service charge calculated on their net total. Now, you want to calculate a 5% VAT on the service charge of the items, not on the net total of the invoice. Empress allows you to do this with ease, ensuring you meet your tax obligations accurately and efficiently.

Feature: Sales Taxes and Charges

Empress’ Sales Taxes and Charges feature allows you to calculate taxes and charges for your sales invoices. Let’s explore this feature step by step.

Step 1: Set Up Sales Taxes and Charges

Navigate to your Sales Invoice. Here, you’ll find the Sales Taxes and Charges section. This is where you’ll configure the tax calculation.

  1. In row 1, set the Type as On Net Total.
  2. Choose the appropriate Account Head.
  3. Input the Rate, if it’s not already specified.

The calculated amount for this specific account head will then be displayed in the Amount column.

Step 2: Calculate Tax on Previous Row’s Amount

In this step, you’ll calculate the tax on the amount from the previous row, which represents the tax amount.

  1. Select the Type as On Previous Row Amount.
  2. Set the Account Head and Rate as required.
  3. Expand the row and set the Reference Row #.

Now, your Sales Taxes and Charges section should reflect your new setup accurately.

Wrapping Up

By following this guide, you’ve learned how to set up a tax calculation that accurately reflects your business’s tax requirements in Empress. Remember, tax laws can be complex and vary by location, so ensure your setup complies with the regulations in your area.

For further assistance, check out Empress’ non-technical resources or reach out to our support team. We’re here to help you make the most of Empress’ features and streamline your business processes.