Here we will look at 3 scenarios
An invoice with 1 tax rate
When viewing a Simple Scan, LiveCosts will create 1 line item based on your suppliers default tax rate. If your supplier does not have a tax rate set, your company's default tax rate will be applied
Ensure the tax amount from the invoice matches the tax amount on the line item
Based on this tax rate, the Line Item will calculate the total less tax & the total. If these 2 totals match the invoice, all items will balance and display a green check.
An invoice with 1 tax rate but requires a correction
In General, tax on Invoices can be calculated in 2 ways
The sum of tax on every Line Item
Calculated from the sub-total
Neither method is wrong but can amount to differences in the calculated amount.
See below example:
Line 1: Item A @ €25.06, tax at 15%: €3.76 line total: €28.82
Line 2: Item B @ €25.61, tax at 15%: €3.84 line total: €29.45
Line 3: Item C @ €25.63, tax at 15%: €3.84 line total: €29.47
Subtotal: € 76.30,
Tax: € 11.44
Total: € 87.74
If tax happened to be calculated on the subtotal:
Subtotal: €76.30 + Tax @ 15%: € 11.45
As you can see there is € 0.01 in the differrence
Check the tax amount matches the tax in the line item
If you notice the balances are not matching by a rounding amount, click on "Insert Zero Rate Balance"
A new correcting line item is added at 0% to balance the invoice.
An invoice with 2 tax rates
As before we start with 1 line item at the supplier default tax rate. First change the tax amount to match the total of the line items for tax rate 1, in this case it is 10%
Click "Insert a Tax Line Item" and select your second tax rate
A new tax line item has been added with the remaining tax from the invoice at your selected rate.