Adjusting Tax Rates

Adjusting Tax Rates

Estimated reading time: 3 min

Overview

This article explains how to update RxWorks sales tax rates. You can change:

  • The default rate
  • The rate for specific services
  • The rate for specific transaction types
  • The rate for a specific fee item

Things To Watch

  • For mixed Practices who don’t close off the month’s debtors until the 3rd or 4th working day, you may be better holding off the tax update until this is done. Just be wary of the current month’s invoices.
  • For credits on a previous month’s invoice after the update it is probably best to hold them and do them together at one time. To do these you will need to change the transaction type back to the old rate and then return them to the updated rate once completed.
  • The other item to be aware of is any fees you have set up as a set price; that is, fees that were set up with a zero markup. When these fees are updated the retail price will not be changed, instead your markup will be reduced. So you will need to go through each of these fees individually and change the retail value or your profitability will be reduced by a tax rate increase.
Sales Tax by Region

Most countries have a tax on goods and services but no tax on interest and account fees. When updating your tax rates, make sure to only set a rate on items and fees that are related directly to goods or services.
Tax laws in the United States vary greatly from state to state, and sometimes from municipality to municipality. Learn more about “Sales tax in the United States”.

The Default Tax Rate

The default tax rate will apply to all items and services. You can override the default tax rate for individual items, entire service headings, and transaction types by following the directions in the article indexes that follow.

Updating The Default Rate

  1. Go to the RxWorks Task Panel.
  2. Select Options from the “toolbar”.
  3. Select ‘D: Finance’
  4. Click on ‘Tax Printing Options.’ The Tax Options dialog will appear.
  5. Enter the new tax rate in the “Default Tax Rate” field.
  6. Click save.

See “Finance Options & Setup” for more information.

Tax Rate by Service Heading

You can set the tax rate for a particular service heading different from the Default Rate. You can enter both a Fixed Tax Rate and a Variable Tax Rate.
A Fixed Tax Rate is the tax rate included for those fees which are charged as one unit, e.g. a leash.
A Variable Tax Rate is the tax rate included for those fees which are charged in multiple units, e.g. a bottle of medication charged by the pill.
In most cases, the Fixed and Variable tax rates will be the same.

Updating Services

  1. Go to the RxWorks Task Panel.
  2. Select Options from the “toolbar”.
  3. Select ‘H: Items’
  4. Click on ‘Services.’ The Configure Services dialog will appear.
  5. Work your way through each service heading changing both the fixed and variable tax rates to the new rate.
  6. As you save each heading it will bring up a box:

    This is to ensure you want that particular service to have a different tax rate than the default rate.

  7. Answer Yes. Another box will appear:
  8. This is to ensure you want the change to affect all existing items in that service heading, rather than new ones being added.

  9. Answer Yes.
This will overwrite any tax rate values that you may have entered into the fees dialog for a specific item. If you answer Yes, you will have to go back to that particular fee and correct it.

See “Item Options & Setup” for more information.

Tax Rate by Transaction Type

Every transaction on a client’s record is defined by a name called the Transaction Type. For example: Invoice, Payment – Cash, Account Fee etc. These names appear on the client’s financial screen, at the top of invoices and on account statements.
You can set tax rates for some, but not all, Transaction Types. The ones you cannot set will be marked in the dialog by a “..”, and will not contain a “Tax Rate” field. See the image below.

Updating Transaction Types

  1. Go to the RxWorks Task Panel.
  2. Select Options from the “toolbar”.
  3. Select ‘D: Finance’
  4. Click on ‘Transaction Types.’ The Transaction Types dialog will appear.
  5. Work your way through each transaction type changing the old tax rates to the new rates.

  6. Click save.

See “Finance Options & Setup” for more information.

Tax Rate by Fee

You can set the tax rate individually for each fee item. This value takes priority over the Default tax rate or the tax rate for the Transaction Type.

Adjusting the tax rate by Service Heading, as shown above, will overwrite the values for all existing fee items. If you had entered a different tax rate into a specific fee, and then adjusted the tax rate by Service Heading, you will need to follow the instructions below again for that item.

Updating Tax Rates In The Fees Dialog

  1. Go to the RxWorks Task Panel.
  2. Select Options from the “toolbar”.
  3. Use the search function to locate the fee you wish to edit. The Fee Details Dialog will appear.

Work your way through each fee you wish to update, changing the tax rates for the fixed and variable components to the new rate and clicking ‘Save’ in the “toolbar”.

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