How are taxes calculated in Procurify?

Answer:

Order Request Level : 

Three different types of taxes can be applied to orders. When adding an item to an Order Request, select the Estimate Taxes field. Here, you can select from three different tax options:

• Pre-set taxes- These are taxes defined under Manage Tax Type in settings. Common examples are VAT, GST, and HST. Click here to learn how to set up taxes in Procurify. 
• Custom percent tax - Custom percent is a tax you can apply by percent when adding the order item. This is not a preset tax that can be pre-set in settings.  
• Custom amount tax - Custom amount tax refers to a taxable amount that can be added by numerical value and can only be applied at the request for order stage, and they cannot be pre-set in settings.  

PO Level: 

• When creating a PO, the tax field is only calculated based on the SUBTOTAL of the line items.
• When applying additional costs at the bottom of a PO (ie- freight, discounts), these will NOT be considered in the tax calculation.
• Taxes are created as miscellaneous costs as soon as a PO is marked as received (or partial received)

Bill Level: 

• Using the Procurify Tax field on the line item level
• When calculating tax during the billing stage, the tax field is only calculated based on the tax percentages applied to individual line items that have been selected. 
• When adding additional costs at the bottom of a Bill (custom costs that you may apply), these will NOT be considered in the tax calculation. 
• Before totaling all of the taxes on the bill, the tax amount for each line item is rounded to 2 decimal places after the calculation. Once the tax for each line is calculated and rounded, the total cost of tax for all line items will be added to the bottom of the Bill.

Taxes can also be added as a Cost Type for a bill. When using cost type, the tax amount must be manually entered