Purchase Tax on Invoices

Overview

NOTE: This data check only applies for Xero organisations.

The Purchase Tax on Invoices bookkeeping data check feature identifies customer invoices that have been posted using a purchase tax code – for example “20% (VAT on Expenses)”, or “Exempt Expenses”.

Transactions checked include:

• Customer Invoice Line Items (line items on a customer invoice)
• OPTIONAL: Money In (direct deposits that get allocated directly). Note: By default bank deposits using a purchases tax code do not get flagged. This is because, often, bank deposits legitimately use purchase tax codes where a deposit is recorded for a purchase refund.

Of course, there will be a very small number of instances where customer invoice transactions have been legitimately coded to a purchase tax code. The purpose of this check is to verify that any such purchase tax codes are in fact correct.

Details provided for each transaction include:

• Type (e.g. customer invoice or money in)
• Contact name
• Date of transaction
• Invoice reference
• Account code used
• Line item details/description
• Net Amount of transaction
• Tax code used

Reviewing the transaction & changing the transaction’s tax code

If you decide that the tax code currently given to the transaction in the bookkeeping software is inappropriate, you can quickly and easily change it using the ‘View/Edit’ actions button, which will open the transaction in a new browser tab.

Dismiss Item

If you decide that a particular transaction already has the correct tax code used, then you can click the “Dismiss” button to hide the item and prevent that specific transaction from appearing in the list again.

Show Bank Deposits Too

Where bank deposits in are not considered in this data check, based upon the toggle position on the settings page for this data check, an additional “Show Bank Deposits Too” toggle will show on the face of the data check page. This enables the user to quickly check that a purchase tax code has not been used on direct bank deposits out (even though such issues are not included in the issue count).

Show Dismissed Items

You can quickly include all previously dismissed transactions, by enabling the “Show dismissed items” toggle.

This allows you to recheck and edit any tax codes that have previously been dismissed in error.

Bulk Process Options

The following bulk actions can be taken by using the check boxes and Bulk Process Options drop down menu:

• Multiple transactions can be dismissed in bulk