IO Miscalculating Invoice Total?
I have a lead (#31863105) that is calculating differently in IO vs. QB and it's not just due to rounding sales tax. I actually can't figure out what IO is doing, because when I do the math it matches what is synced to my QB.
Here's my math...
Rentals total: $1793 (matches on both invoices)
Nontaxable rentals: $250 (matches on both invoices)
Taxable subtotal: $1553 (matches on both invoices)
Tax Rate: 8.1% (matches on both invoices)
Total Tax: $125.793
Nontaxable Fees: $677.50
Pre-tax (taxable) discounts: $2230.49 (for a tax reduction of $180.669
Total Discounts $2411.16
So to get my invoice total, I sum taxable subtotal * 1+tax rate, nontaxable fees, and total discounts:
($1553*1.081) + $677.5 - $2411.16 = -$54.867
Somehow IO thinks that there's a zero balance on the invoice. Quickbooks and I disagree. How can I reconcile?
The same question
I think I may have figured it out...if you just want the fix, and not the "why", then jump down to SOLUTION below.
Not 100% of the pre-tax discounts should *actually* have been pre-tax. When discounts lump pre-tax and tax-free together to be discounted as a whole the IO and QB systems treat it differently:
IO: maxes out the taxable items, then applies the remainder of the discount against the non taxed revenue at a non-taxed rate.
QB: applies the total taxable discount to the invoice at the full rate, resulting in a negative balance (because the non-taxed items are being discounted at the taxed rate).
Example: in a location with 10% tax, an invoice with a $100 taxable subtotal and $200 non-taxable subtotal would result as follows if given a $150 discount, marked as taxable:
IO: The $150 discount would be applied at a 110% rate to the $100 taxable portion, but the remaining $50 would be applied to the nontaxable portion at a 1:1 ratio. Result is a balance due of $150.
QB: The $150 discount is applied at 110% to the entire balance, resulting in a subtotal of $150, but a negative tax due of $5 (for the remaining $50 that was not taxed as a charge, but is still being discounted at the taxed rate). This results in a balance due of $145.
SOLUTION:
Make sure that taxed discounts (with the checkbox checked) do not exceed the amount of taxed charges on the invoice. Ensure that any discounts on non-taxed items are entered as a tax-free discount.
I think I may have figured it out...if you just want the fix, and not the "why", then jump down to SOLUTION below.
Not 100% of the pre-tax discounts should *actually* have been pre-tax. When discounts lump pre-tax and tax-free together to be discounted as a whole the IO and QB systems treat it differently:
IO: maxes out the taxable items, then applies the remainder of the discount against the non taxed revenue at a non-taxed rate.
QB: applies the total taxable discount to the invoice at the full rate, resulting in a negative balance (because the non-taxed items are being discounted at the taxed rate).
Example: in a location with 10% tax, an invoice with a $100 taxable subtotal and $200 non-taxable subtotal would result as follows if given a $150 discount, marked as taxable:
IO: The $150 discount would be applied at a 110% rate to the $100 taxable portion, but the remaining $50 would be applied to the nontaxable portion at a 1:1 ratio. Result is a balance due of $150.
QB: The $150 discount is applied at 110% to the entire balance, resulting in a subtotal of $150, but a negative tax due of $5 (for the remaining $50 that was not taxed as a charge, but is still being discounted at the taxed rate). This results in a balance due of $145.
SOLUTION:
Make sure that taxed discounts (with the checkbox checked) do not exceed the amount of taxed charges on the invoice. Ensure that any discounts on non-taxed items are entered as a tax-free discount.
I think I may have figured it out...if you just want the fix, and not the "why", then jump down to SOLUTION below.
Not 100% of the pre-tax discounts should *actually* have been pre-tax. When discounts lump pre-tax and tax-free together to be discounted as a whole the IO and QB systems treat it differently:
IO: maxes out the taxable items, then applies the remainder of the discount against the non taxed revenue at a non-taxed rate.
QB: applies the total taxable discount to the invoice at the full rate, resulting in a negative balance (because the non-taxed items are being discounted at the taxed rate).
Example: in a location with 10% tax, an invoice with a $100 taxable subtotal and $200 non-taxable subtotal would result as follows if given a $150 discount, marked as taxable:
IO: The $150 discount would be applied at a 110% rate to the $100 taxable portion, but the remaining $50 would be applied to the nontaxable portion at a 1:1 ratio. Result is a balance due of $150.
QB: The $150 discount is applied at 110% to the entire balance, resulting in a subtotal of $150, but a negative tax due of $5 (for the remaining $50 that was not taxed as a charge, but is still being discounted at the taxed rate). This results in a balance due of $145.
SOLUTION:
Make sure that taxed discounts (with the checkbox checked) do not exceed the amount of taxed charges on the invoice. Ensure that any discounts on non-taxed items are entered as a tax-free discount.
I think I may have figured it out...if you just want the fix, and not the "why", then jump down to SOLUTION below.
Not 100% of the pre-tax discounts should *actually* have been pre-tax. When discounts lump pre-tax and tax-free together to be discounted as a whole the IO and QB systems treat it differently:
IO: maxes out the taxable items, then applies the remainder of the discount against the non taxed revenue at a non-taxed rate.
QB: applies the total taxable discount to the invoice at the full rate, resulting in a negative balance (because the non-taxed items are being discounted at the taxed rate).
Example: in a location with 10% tax, an invoice with a $100 taxable subtotal and $200 non-taxable subtotal would result as follows if given a $150 discount, marked as taxable:
IO: The $150 discount would be applied at a 110% rate to the $100 taxable portion, but the remaining $50 would be applied to the nontaxable portion at a 1:1 ratio. Result is a balance due of $150.
QB: The $150 discount is applied at 110% to the entire balance, resulting in a subtotal of $150, but a negative tax due of $5 (for the remaining $50 that was not taxed as a charge, but is still being discounted at the taxed rate). This results in a balance due of $145.
SOLUTION:
Make sure that taxed discounts (with the checkbox checked) do not exceed the amount of taxed charges on the invoice. Ensure that any discounts on non-taxed items are entered as a tax-free discount.
That is a good way of articulating this accounting snafu:)
The issue was basically the taxable discount exceeding the taxable items, which can be worked around with your solution.
Please let us know if we can help further.
That is a good way of articulating this accounting snafu:)
The issue was basically the taxable discount exceeding the taxable items, which can be worked around with your solution.
Please let us know if we can help further.
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