What is a Unified Tax?
A unified tax is a unique identifier that standardizes tax information for both the accounts payable team and vendors. This allows you and your vendors to map taxes to a common reference, ensuring consistency, accuracy, and compliance in tax calculations for bills and invoices.
Table of Content
- How to assign tax as Unified Tax in Taxes?
- How to assign tax as Unified Tax in Invoices?
- How do you assign tax in Bills?
- How are the taxes synced from your system to your vendor's system?
How does Unified Tax work?
Unified Tax helps keep tax information standardized between your and vendor systems. It simplifies the management of tax details, ensuring that all your bills and vendor invoices have accurate and consistent information.
To set up and enable unified tax for your and your vendor's system, contact support@peakflo.co. We will create a Unified Tax table that can be customized to meet your specific business requirements.
The Unified Tax table is a universal list of taxes based on country. If you are unable to find a tax in the Unified Tax table, please contact our support team at support@peakflo.co.
In the Unified Tax table, each tax is assigned a unique identifier called Unified Tax ID to ensure proper mapping and standardization. Each tax can have only one Unified Tax ID, also called the Unified Tax Name.
Mapping of tax from invoice to bill:
When your vendor creates an invoice and each tax in the line items are assigned a Unified Tax Name, then once the invoice is issued and a bill is created, the taxes in the bill line items are synced from the vendor invoice.
Mapping of tax from bill to invoice:
When edits are made to the tax details in the bill line item which has an assigned Unified Tax Name, then the same changes will be reflected on the vendor invoice.
How to assign tax as Unified Tax in Taxes?
1. Go to "Items" from the sidebar and click "Taxes".
2. Click on the tax for which you want to assign a unified tax.
3. From the "Unified Tax Name" drop down select the Unified tax name to which you want to map the tax.
4. Click "Save" to record your data.
Follow the video below:
Multiple taxes cannot be assigned to one unified tax name.
How to assign tax as Unified Tax in Invoices?
First, vendors need to configure the Unified Tax by mapping their tax rates to the unified tax table in Peakflo. To set up Unified Tax, vendors can reach out to support@peakflo.co
1. When creating or editing an invoice, click on a tax under the "Taxes" column.
2. A pop-up will appear, click on the "Select Tax" drop-down.
3. Scroll to the bottom and click on "Create New Tax".
4. Fill in the tax details like name, amount, and category, and from the "Unified Tax Name" drop down select the Unified tax to which you want to map the tax.
Remember, multiple taxes cannot be assigned to one Unified Tax Name.
5. Click "Save" to record your data.
Follow the video below:
How do you assign tax in Bills?
1. When creating or editing a bill, click on a line item to expand the view.
2. Click the edit button for the line item for which you want to assign unified tax.
3. Click the "Edit" option under the column "Taxes".
4. Click on the "+TAX" option.
5. Then click on the "Tax Name" drop-down.
6. Scroll to the bottom of the drop-down and click on "Create New Tax".
7. Fill in the tax details like name, amount, and category, and from the "Unified Tax" drop-down select the Unified tax name to which you want to map the tax. Then click "Save and Close".
8. Now select and apply the newly created tax to the bill line item and hit Save.
Follow the video below for more details. 
How are the taxes synced from your system to your vendor's system?
When an approved Purchase Order (PO) containing taxes is synced with your vendor's system as a Customer Purchase Order (CPO), Peakflo automatically matches the line item taxes from the PO to the CPO by finding the corresponding taxes in the Unified Tax table. This ensures that the tax percentage, tax category, and Unified Tax Name or ID are accurately aligned, promoting consistency across both systems.
As in the image below, here are the tax details from the PO.
In this image, the tax details of the PO are synced to the CPO.
Now, when the vendor creates an invoice from the CPO, the tax details will automatically synced from the CPO line items to the Invoice line items.
The vendor will not have the ability to modify the tax details in the invoice.
Once the vendor approves the invoice, it will be synced with your system as a bill. Consequently, the tax details from the vendor's invoice line items will also be automatically synced to the corresponding line items in your bills.
If you modify the tax details in the bill, like in the image below.
Then Peakflo will refresh and sync the line item tax from the bill to your vendor's invoice by identifying the tax that corresponds to the shared Unified Tax from the Unified Tax table.
This process is similarly applicable to invoices generated by the vendor from a Customer Receipt Note.
FAQ
Can I disable vendors to add tax in invoice line items?
Yes, line item tax can be disabled in the vendor invoices. Please contact support@peakflo.co to customize line item tax in vendor invoices
