<aside> 💡 Subscript can work with taxes in different ways, depending on your General Ledger (GL) and your exact needs. This configuration is done during your onboarding, so don’t hesitate to contact our Data Solutions team to learn more about the options available and recommended for you!

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Quickbooks

There are four ways you can add taxes to your invoices in quickbooks:

  1. You can use mapped tax codes with this option, we can set rules in Subscript that determine when to add taxes, and which tax codes to use when the mapping rules apply. For example, maybe you always tax 15% VAT in Norway, and 0 tax everywhere else. This can be accomplished with mapped tax codes - ask your Subscript contacts for help setting this up! In this option, taxes will be added to your invoice once you save the invoice to Quickbooks. After saved to QBO, your invoice will show the corresponding taxes in Subscript.

  2. You can use automated tax calculation This option allows you to tell Quickbooks to use its auto-tax settings to add taxes to invoices. Quickbooks will then own the logic of how much tax to add to each invoice. In this option, taxes will be added to your invoice once you save the invoice to Quickbooks. After saved to QBO, your invoice will show the corresponding taxes in Subscript.

    The above two settings are available on the settings → quickbooks page

    The above two settings are available on the settings → quickbooks page

  3. You can use an external service like Avalara or Anrok. To use this option, turn on “use automatic tax calculation” - even though you are not using Quickbooks native automatic tax, this will tell Subscript to get the taxes added to your Quickbooks invoices. Taxes will be added to your invoice once you save the invoice to QBO, and it requests taxes from the external service. After saved to the GL, your invoice will show the corresponding taxes in Subscript.

  4. You can add taxes manually to invoices - when you are drafting an invoice, you can add taxes by pressing the Add Taxes button. This method is only recommended if your QBO doesn’t handle taxes correctly based on the product / account, or your tax codes.

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<aside> 💡 If you’re using automatic tax calculation or mapped tax codes, adding or editing taxes manually is not possible. Quickbooks or Xero will calculate taxes for you, and Subscript will just display and print them.

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Xero

As for Xero, Subscript allows automatic and manual taxes calculation methods for Xero:

  1. (Recommended) Mapped tax codes. In this method, the tax calculation is done by Xero, based on the tax rate in the income account. This tax rate is configured in Xero, but can be passed from Subscript depending on your bill-to country, transactions currency and others. Taxes will be added to your invoice once you save the invoice to Xero. After saved to Xero, your invoice will show the corresponding taxes in Subscript.

  2. Automatic tax calculation. In this method, the calculation is done by Xero, based on the account chosen for each line item. Taxes will be added to your invoice once you save the invoice to Xero. After saved to Xero, your invoice will show the corresponding taxes in Subscript.

    1. This works as Mapped tax codes, but allows no custom mapping in Subscript at all.

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<aside> 💸

The tax rate in the product in Xero plays no role in generating taxes in invoices sent from Subscript.

Either Subscript can send the tax rate if you have custom mappings, or the tax rate will be the one from the income account in your Xero.

You can set the income accounts for individual products in Subscript under Settings > Products, and the fallback account (in case there’s not one specific for each product) is set under Settings > Xero.

Tax rates for income accounts need to be set in Xero directly.

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  1. Manual taxes entry, that Subscript can either let you enter from scratch, or suggest you the rate based on the bill-to country or another criteria. This method is only recommended if your Xero doesn’t handle taxes correctly based on the product / account, or your tax codes.

Other, or no General Ledger Connected

In case you have no GL connected to Subscript, you have two options for taxes handling in Subscript:

  1. Add your taxes manually to your invoices, by clicking Add Taxes and entering the % for Subscript to calculate the amount for you.

  2. Have Subscript suggest you a tax rate on your invoices depending on the customer country, the transactions currency or some other criteria that can be automatically inferred. You would be able to change the tax rate in that case.

    👉🏼 Contact our Data Solutions team if this option feels appealing to you!

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