Hi,

We charged a customer Ontario HST instead of just GST and we want to issue a credit note for the overcharged tax. Because we are crediting tax and not an actual product, I am not sure exactly how to do this. Should I set up a new item named HST Credit and set the credit account to Account Receivable? How do I make sure the debit goes to the GST Payable Account and not the client sales account?

RD

Hi Ryan

In general the cleanest way to handle this is to credit the full invoice and start over by copying the order and fixing the tax, then re-invoice.

Steve

Hello Ryan:
I agree with Steve, that the easiest method is to start over by issuing a CR Note and redoing the Invoice.

If this is an OE application, another thing that you could do is to set up a Misc. Charge called Tax (or GST/HST) Adjustment and point to the appropriate GL account. (We had to do this with a client that had to adjust quite a number of Invoices that had the wrong tax applied, but they wanted to retain the original Inv #'s.) If you go with this method, make sure that you set this Misc Charge as NON-TAXABLE!

Although Sam's alternative method works for crediting the customer account, it doesn't work for purposes of sales tax reporting. It should be used only if you don't depend on Adagio for generating your sales tax reports.

Steve