There may be a time when a Vendor will charge you sales tax on your Purchase Order(s).
There are two ways to handle this:
The first, and easiest, is when creating your Item/Component just add the sales tax amount into the cost of the Component. This is recommended when you need to add Sales Tax on a Purchase Order occasionally
The second way to add Sales Tax is a bit harder as it involves customizing your company settings, but when done properly, will show the Sales Tax separately on the PO. This is recommended when most of your Purchase Orders will include sales tax to the Vendor
Add Sales Tax by Adding a Component
Add Sales Tax by Adding a Component
1. Navigate to the Project that you want to add a Vendor sales tax too. Choose the Item you would like to add sales tax to within your Project by clicking on the Ref. No to edit the Item.
2. Scroll down to the Purchase Components Information tab. Click on the Add button to create a new Component.
3. Name the Component, Sales Tax. Choose the Vendor from which the sales tax is being charged.
4. Under the Cost/Pricing tab, enter the Sales Tax amount in Unit Cost. Make sure that the Markup amount is zero and to uncheck the Taxable box. When finished, click Save in the upper right.
5. The Sales Tax Component should now be visible under the Purchase Components Information tab on the bottom of the Item page, and can be selected as a Component when creating a Purchase Order. Click here to learn how to create a Purchase Order.
Add Sales Tax by Customizing your Purchase order
Add Sales Tax by Customizing your Purchase order
1. First, you will need to change one of your Component Types to be set to Sales Tax. Click here for full details on how to do this.
2. Once you have completed the steps in the article above you will have settings similar to those below:
3. In the above settings under PO/WO Order, setting the sales tax component to Total is suggested.
4. If the Project you wish to add Sales Tax to a PO has already been created, you will ALSO need to change the Sales Tax Component Title on any of these Existing Projects. To do so, follow the steps below:
Click on the Project Name or Project Code to edit the project.
Click on the Settings tab
Click on Advanced/Mark-up
Go to the PO/WO tab
Change the Title for the Sales Tax Type Component to Sales Tax and Change the Style to Total.
5. Once the Company and Project Settings are changed, you will need to add the Sales Tax Component to the Item. You will add this like any other Component is added.
6. The Type you choose from the drop-down is Sales Tax.
7. You may want to uncheck the Taxable box for the sales tax Component because the Component is Sales Tax itself already. However, you should ALWAYS check with your accountant to ensure you are handling sales tax properly, particularly when the Vendor includes tax on your PO, as the laws differ from state to state.
8. Once added, the Sales Tax component will show on the Purchase and Work Order Components grid of the Item window.
9. You can then Add a New Purchase Order and tag this Component to be included in it.
10. The Purchase Order will show the Sales Tax Component down at the bottom in the Totals, as seen in the example below.
