Managing how tax is applied to your quotes and invoices allows you to set your pricing structure while maintaining full flexibility for specific customers and individual documents. You can configure tax settings as tax inclusive or tax exclusive, set an organization-wide default, and easily override it whenever necessary.
Understanding tax exclusive vs. tax inclusive
Before setting your defaults, it helps to know how each option calculates your document totals:
- Tax Exclusive: Taxes are calculated on top of your line item prices and added to the total at the bottom of the quote or invoice. For example, if a service costs $100 and tax is 10%, the line item displays as $100, tax is calculated as $10, and the final total is $110.
- Tax Inclusive: Your line item prices already include the tax. The platform back-calculates the tax portion embedded in the total. Using the same example, if a line item is set to $100 tax inclusive (at 10% tax), the total remains $100, which accounts for $90.91 for the service and $9.09 in tax.
Setting the default for your organization
Set a global tax preference that applies automatically whenever you create a new quote or invoice.
- Click your Account Name in the top-right corner dropdown menu.
- Select Manage Organization.
- Navigate to Business Details.
- Locate the Tax Calculation option and choose your default:
- Tax Exclusive: Tax is added on top of line prices
- Tax Inclusive: Line prices already include tax
Overriding defaults for specific customers
If you work with clients who require a different tax treatment than your default, you can set a permanent rule on their profile.
- Navigate to Customers and select the customer profile.
- Locate the Tax Calculation setting in Default Settings.
- Choose one of three options:
- Use organizational default: Applies the setting configured under Business Details.
- Exclusive: Tax is added on top of line prices with this customer.
- Inclusive: Line prices already include tax with this customer.
Adjusting tax settings on a quote or invoice
Your organization and customer preferences carry through automatically when building a new quote or invoice. However, you can change the tax calculation for a specific document without changing your default settings.
- Open the Quote Builder or Invoice Builder.
- Locate the Details section.
- Use the Tax Setting dropdown to switch between Tax Exclusive and Tax Inclusive for that document.
