Working with Tax & Compliance

Tax & Compliance reads the tax on the invoices you issue and receive, and compares it with the rates for the locations you have told it you operate in. It reads each filing you make, the return you send to a state or the IRS, and compares it with the tax accounts in your books. It reports whatever does not agree, in dollars, and keeps the next due date in view. This page is how to work with it from day to day.

What to put in the Data Room

Two documents are sufficient to begin: a filing, and the tax report from your accounting system for the same period. They sit in the Data Room beside Contracts and Agreements and Invoices, and the module's own Data Room tab lists them under Filings. One filing and one tax report for the same period produce a first finding: whether the filing agrees with your books.

Add the remaining documents as you have them, because each one allows another check to complete. The invoices you issue to customers go in Invoices, and their tax lines let the rate check compare each line with the rate for the customer's location and item. The invoices your suppliers send you go in Invoices too, and they let the purchases check test the tax you claim back against the rules you have given. Every further filing lets the calendar check mark it filed on time, and lets the books check match it to your tax accounts for that period.

Add documents with Add to Data Room, as PDFs, or let a Connection deliver them. A Connection such as Xero brings in your invoices and your tax accounts as rows, and a row is examined the same way as a document you added. Payments to contractors, as rows a Connection brings in, let the contractor check see who was paid more than the reporting threshold in the year. Open the module's Data Room tab to see which documents it has drawn on and to link one it has not used yet. The Data Room explains where documents live and what each kind is for.

When it asks you a question

Tax & Compliance is the one module that asks before it starts. When you first open it, it asks two questions: which states you operate in, held once for the whole company, and which tax filings you make and how often. It cannot say anything true without them, and after that it asks only when a check needs an answer. Where a check has a default, such as the IRS figure for reporting a contractor's payments, it uses it and names it in the finding. Most values here have no safe default, so the check waits as a needs-information finding until you answer. The filing calendar is the first of the module's five questions, and the other four arise only when a check needs them: your sales tax registration number for each state, anything you sell that is not taxed, the amount above which you report a contractor's payments in a year, and any purchase tax you can claim back or cannot.

A question arrives as a needs-information finding in the Findings list, and as a card in Ask Ressura. Your answer becomes an entry in your Organisational context, with your name and the date on it, and the check runs again automatically. Every answer here is scoped to the module, so an exempt item (one you sell without tax) or a registration number is read for every tax account, not for one. The states you operate in are held on the company, so no other module asks for them again.

How to read a finding

The module's Overview shows Under-collected, the sum in dollars of the tax that should have been charged on invoices in the filing period and was not. Tax charged above the rate is an exception too, but the headline counts only the shortfall. Beside it the Next filing due card names the next due date and the location it is for. Beneath them sit the tax accounts, such as each state's sales tax and federal withholding (tax held back from pay for the IRS), sorted by the next due date. Its Findings tab lists every finding: the tax account, the Control that produced it, its kind, the amount where there is one, the confidence, its disposition and the date. Choose Review finding to open one.

An exception on an invoice says what was charged, what your rules set for that location and item, and the difference. An exception on a filing says what the filing reports, what the tax account in your books holds, and the difference. Its provenance shows the invoice line and the context entry that set the rate, or the filing and the account in your books, each with its period. You can check the arithmetic yourself, and when a finding leans on a default rather than a value you gave, it says so explicitly.

A needs-information finding names the fact that would let a check finish: a location you have not said you operate in, a filing it cannot see, or a contractor's tax id. A sale to a location outside your list is always a question, never an exception, because only you can say whether you operate there. It never blocks the other checks. A fraud-risk finding comes from Fraud Watch and links the findings behind it. The Checks tab shows each of the seven Controls with its pass, exception and needs-information counts for the filing period.

How to disposition a finding

You answer a finding in one of three ways, and each answer is recorded with your name and the date. Accept an exception when the tax was wrong, such as an invoice that charged the state rate and missed the city's, and add a note if you like. Reject it with the reason when the tax was right, such as a wholesale customer who is exempt and pays no sales tax. The reason becomes a context entry, scoped to this finding, this tax account, this module or the whole company, so the same point is never raised twice. Answer a needs-information finding by adding the filing it asks for or by typing the answer, such as a registration number, and the check runs again.

A tax account's own page, under Tax accounts, gathers its findings, its filings and its context entries in one place. It shows the account's registration number, how often it is filed and when it is next due. Findings and Dispositions has the rules every module shares, including the two-person rule for rejecting a fraud-risk finding.

What it costs

Running its checks, opening a finding and dispositioning one cost nothing, and checking the same documents again is free.

This page is the how-to. The Tax & Compliance page says why it exists and what it checks.