Issue - QuickBooks Calculates tax differently than ESC

Description of Issue:

When posting an invoice from ESC to QuickBooks the following message is displayed:

  • Tax amount was figured differently in QuickBooks for invoice 0000001213. An adjustment will have to be made in QuickBooks for the difference.
Cause of Issue:
  • ESC and QuickBooks calculate tax differently when using a Tax Code that contains multiple line items
  • ESC will apply the tax due to each line item and round each one
  • QuickBooks will round the total and then divide it up among the line items
  • Occasionally this can result in rounding errors

Example: A Tax Code is setup in ESC and QuickBooks. This code contains two line items, one for 4.25% and one for 2.5%. The total tax is 6.75%. If this Tax Code is applied to an Invoice for $10.47

ESC will first multiply the total by 4.25% to arrive at $.444975 which is rounded to $.44. It will then multiply the $10.47 total by the other tax item at 2.5% for a total of $.26175 which is rounded to $.26. This results in a total tax of $.70 in ESC.

QuickBooks will multiply the entire 6.75% to the total to arrive at a tax of $.706725 which gets rounded to $.71. This $.71 is then distributed between the two tax line items.

Resolution:

Since you will be paying your taxes out of QuickBooks, accept the QuickBooks total and do nothing. This may differ slightly from ESC but will not have any adverse effect on your accounting or reporting.

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