When it comes to taxes, we feel your pain. So starting today you can take advantage of a redesigned and more flexible way to handle taxes on your invoices and expenses.
Harpoon is an international product. And many of our customers face complex and ever changing tax requirements for their businesses. For example, when invoicing you might be required to collect a Goods and Services Tax (GST) in your country, or maybe a Provincial Sales Tax (PST). On top of that you might have a mix of goods and services on a single invoice, each requiring a unique combination of taxes to be collected. And when paying for expenses you might be required to track the amount of Value Added Tax (VAT) included. It can get complicated, and we feel for those of you who need to deal with these intricate tax systems. The good news is we’ve made it much easier to accommodate a wide variety of tax needs in Harpoon while at the same time sticking to the design simplicity we strive for.
How Does It Work?
For starters you now have a dedicated Taxes screen in your Settings that allows you to create and manage all the different kinds of taxes you’re responsible to collect on your invoices or track on your expenses.
Here you have the freedom to create as many tax types as you need (e.g. VAT, GST, PST, HST, etc.), including the name, rate, and optional ID for each tax. Not sure if you should be collecting taxes on your invoices or tracking taxes on your expenses? We highly recommend consulting with your accountant to make sure you’re running your business on the up and up. It’s worth the peace of mind to know you’re handling things the right way.
Taxes on Invoices
The global taxes you create in your Settings will now show up as available options on your invoices. When creating or editing an invoice you’ll notice we’ve removed the previous single Tax field and replaced it with a new Tax dropdown menu that’s available on every line item of your invoice.
The Tax dropdown menu gives you the freedom to apply as many tax types as necessary to each line item, allowing a different combination of taxes on a per line item basis. And as you apply these taxes you’ll see the applicable amount for each tax displayed in the subtotal area of your invoice.
So instead of a single tax that's applied to your entire invoice you can now have multiple taxes that can be applied in different combinations on a per line item basis. But what happens to your existing invoices that utilized the old tax field? Not to worry. Your existing invoices will be automatically updated to include the same global tax percentage originally applied. And when editing your existing invoices you can take advantage of the new tax interface to make any changes.
Taxes on Expenses
In your country you might be required to track the amount of taxes you pay on the expenses your business incurs. This is now easy to do in Harpoon. When creating or editing an expense you’ll see a new tax option available.
Selecting this option will reveal a new tax interface for your expense.
Here you can select from any of the global taxes you created in your Taxes settings. When a tax is selected Harpoon will automatically calculate how much of the expense’s total amount was a tax based on the rate of the selected tax. If you need to track more than one tax on the expense keep adding as many taxes as you need and Harpoon will automatically recalculate the tax amounts for you.
Tax Summary Report
With all of these taxes being collected on your invoices and tracked with your expenses you’re going to need a simple way to summarize and share this tax data with your accountant. For that we’re providing a new Tax Summary report.
The Tax Summary report will list every tax applied in your Harpoon account (for both invoices and expenses) within a selected date range.
For each tax applied the report will provide the total Taxable Amount of both the invoice payments you’ve collected and the expenses you’ve recorded, and the Net difference between the two. The report will also provide the total amount of Taxes for those same invoices and expenses on a per tax basis, and the Net difference between the two.
In summary, taxes aren’t fun, but we hope these new tax features ease the burden by providing more flexibility for those of you who face complex and ever changing tax requirements for your businesses. And for those of you who have simpler needs these new features have been designed to stay out of your way. Again, if you’re not quite sure how or if your business should be handling taxes on your invoices and expenses we highly recommend consulting with your friendly accountant. They’ll steer you in the right direction.