Adjusting sales taxes on a correction

If your customer wants a credit invoice for price or taxability, use the Correction (CR) order type. A CR uses a double entry for each line item. The first entry credits the original line item, and the second entry is for the correct entry. These instructions assume you are adjusting taxability of an order with two products.

  1. Select Sales > Entry > Order.
  2. In the Order Type field, select Correction.
  3. Complete the remaining fields in the Initiate window.
  4. Click Next.
  5. In the Correction window, specify a Return Adjust Reason.
    For example, Adjustment Tax.
  6. Optionally, in the Invoice # field, specify the number. If you specify an invoice number, the correction amount is applied as a partial payment toward that invoice. If you do not specify an invoice number, you can create a miscellaneous credit for the current date.
    Note: If you are using Sovos GTD with the STEP Interface, do not select the Use Step Data option, unless you are entering a Correction order to reverse taxes that are charged to an exempt customer.

    See Correcting invoices where the incorrect exemption certificate was applied.

    If you are using Sovos GTD, the invoice date parameter sent from the system to Sovos GTD controls which rates are applied to the order. You can link a Correction order at the line level to a previously invoiced order. The invoice date from that previously invoiced order is sent to Sovos GTD so that the tax rates in effect on that date can be applied to the CR line. To link the invoice at the line level, in the Select Products-Extended view, specify the invoice number in Correction Invoice field. The invoice date is also displayed.

  7. Optionally, select or clear the Auto-Apply Credit to Original Invoice option. Use this option to specify how to apply credit transactions. The default value for this option is set in SA Administrator Options-Documents-Sales Orders. You can change the selection if your operator security allows it. The selection in this field, in combination with the original invoice value, determines whether credit is applied.
  8. Click OK.
  9. In the Add Line Item section, specify the first product, quantity, and price of the order that was billed incorrectly.
  10. Select the Credit option.
  11. Click Add.
  12. In line 2, specify the second product, quantity, and price.
  13. Select the Credit option.
  14. Click Add.
  15. In line 3, specify the first product, quantity, and price.
  16. Select the Debit option.
  17. In the Extended view, clear the Taxable option.
  18. Click Add.
  19. In line 4, specify the second product, quantity, and price.
  20. Select the Debit option.
  21. Click Add.
  22. Click Continue.
  23. In the Taxes & Totals view, verify the taxing jurisdiction and amount are updated.
  24. Compete the correction.
  25. Click Save.
Related topics