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Creating sales invoice with tax-inclusive amounts |
  
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Creating sales invoice with tax-inclusive amounts |
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If you charge tax, by default unit prices on sales invoices are treated as tax exclusive. You can make unit prices tax-inclusive when creating or editing invoices.
Tax exclusive means, when line items on the invoice are subject to tax, the tax will be added to the tax-exclusive total.
For example, let's say we charge a customer 1,000 with 10% tax.
Since the amount of 1,000 is tax exclusive, when you create the invoice, 10% tax will be added to the 1,000, increasing the total to 1,100.
Many businesses prefer to show tax-inclusive prices on invoices. For example, you sell a widget for 999 which should be inclusive of tax. In order to do that, make sure Amounts are tax inclusive is checked.
Then enter unit price 999.
When viewing the invoice, you will notice the tax of 10% wasn't added to the amount of 999. The balance due is 999 and the invoice shows the tax amount.
