We hope that everyone has enjoyed a profitable tax season, or at least kept stress to a minimum. A few months ago we discussed Commerce Sync support for transferring Sales Tax collected in Clover. Now that the taxman has come and gone (mostly), we are pleased to announce Multi-Tax support for Clover POS businesses that use Xero accounting software.
What do we mean by Multi-Tax support?
A single Clover business may use multiple tax rates based upon the goods and services they sell. A common example would be for a municipality to tax liquor and tobacco at a higher rate than groceries. This applies to whether a business uses multiple tax rates at any point throughout a given day, even if they never occur on the same Clover sale (or Order).
An effective Tax Rate may be a combined rate of smaller individual percentages - e.g. State, City and County. Multi-Tax support processes multiple effective rates for a day or order, regardless of whether they are single or combined rates.
Tax Rates are created and managed through the Clover set up app. For more information, see Clover help.
How it works
Currently, Clover businesses with multiple tax rates that attempt to activate Commerce Sync are put into a manual review process. With multi-tax support, Xero users complete activation without delay. Additionally, no further setup is required. Here is a sample invoice for a Xero Daily Summary using multiple effective tax rates:
If the Clover Tax Rate does not already exist in Xero, Commerce Sync creates it automatically, cutting down on setup time. Just like a single-rate Daily Summary, all of the appropriate Tax Liability is tracked in an account associated with the rate within the Chart of Accounts.
What about QuickBooks?
The Commerce Sync Multi-Tax feature is currently not available for QuickBooks Online accounting software. One of the chief reasons is because QuickBooks Online only supports a single Tax Rate per Invoice or Sales Receipt. Are the Clover QuickBooks users left out to dry then? No. We have noticed that many Clover businesses decide not to transfer Sales Tax with Commerce Sync (and presumably find another way to avoid the wrath of all of Uncle Sam’s little State, County and City nephews). Clover QuickBooks users with multiple tax rates may still use Commerce Sync by unchecking Transfer Sales Tax in their Commerce Sync Dashboard settings:
In this case, Sales Tax is rolled into the Sales Income Totals for each Invoice line, rather than transferred as Tax Liability. For example, if a business collected the following in a single day:
- $100 worth of Coffee taxed at 5%.
- $5 worth of Sales Tax for Coffee.
- $100 worth of Beer taxed at 10%.
- $10 worth of Sales Tax for Beer.
Commerce Sync would transfer this sales information into QuickBooks Online as one Invoice with 2 lines and the tax rolled into the Income total ($105 first line, $110 second line). This option will not work for businesses who wish to pilot the upcoming Line Item Detail feature, who must transfer Sales Tax as-is for books to balance properly.
That’s it! For Clover businesses that have to levy multiple Sales Tax rates, signing up for Xero may be a compelling choice. If you don’t yet use accounting software, you can sign up during the Commerce Sync activation process.