Manage taxes in a cash basis taxpayer¶
Viindoo Software provides the Cash Basis feature to help your business easily record taxes incurred when they are defined as valid according to the cash basis accounting method.
Related settings¶
To use the Cash Basis feature, navigate to and select Cash Basis.
Warning
Only users with administration settings rights can access this interface.
You need to pay attention to the following two configurations that will be displayed once this feature is enabled:
- Tax Cash Basis Journal: This journal records taxes incurred while using the cash basis accounting method. The system automatically selects a journal for this field by default.
- Base Tax Received Account: The account used for tracking the tax base amount used in the cash basis journal entry.
Then press Save to record the configuration.
Navigate to to modify the taxes settings.
On the tax, pay attention to the followings:
- Advanced Options tab:
- Tax Due: Select Based on Payment.
- Cash Basis Transition Account: This field appears when you select Based on Payment. You need to select a created transitional account to record the provisional tax amount once the invoice is posted and before recording the payment. Steps to create a new tax account on Chart of Accounts.
Note
A similar configuration is required for other sales and purchase taxes that your business needs to manage.
Manage cash basis taxes¶
With the cash basis taxes management, the taxes incurred on unpaid invoices and vendor bills will be recorded in the transitional account.
Once the invoice/bill is paid, a journal entry recording the transition of taxes from the transitional account to the main account will be created.
You can navigate to to group by Journal to easily review this newly created entry.
