Adding Taxes, Discounts, or Fees to Sales or Purchase Orders

This video shows the process of adding taxes, discounts, or fees to sales or purchase orders using our software. These flow through the invoicing and reporting modules, but they are edited on the sales order.

Adding Taxes, Discounts, or Fees to Sales or Purchase Orders

See the video below for instruction.  The video has a sale order as an example, the process to add taxes, discount, or fees is exactly the same for a purchase order.

Adding Taxes, Discounts, or Fees to Sales or Purchase Orders


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Video Transcription

Hello. Mike Kroeger here, Finale Inventory. In this short video, we’re going to cover adding taxes, discounts, fees or other costs to your purchase orders or your sales orders. So, let’s get to it.

In Finale Inventory, when you either are creating your purchase orders or your sales orders, you may need to record other charges or fees or discounts that are not related to inventory items on those purchase orders or sales orders. Finale calls those adjustments. Now, where you set those adjustments up are in your application settings. So, remember, you can get to application settings here from the Home screen or you can just click on your company name in the upper right. So, a shortcut here, I’m going to go to Application settings.

When you’re talking about adding discounts and fees to either your purchases or selling or your service orders, you’re going to see them here in the Application settings under these two tabs. So, you would go to Purchasing for discounts and fees related to purchasing, and then you go to Selling for sales orders. So, they’re listed here under the side menu called Adjustments. So these adjustments are where you would…can create and configure what types of discounts, fees, or taxes you incur.

So you need to type a name and the name is what going to be recorded under and especially in the report section later when you wish to see what you have spent money on in relation to these fees. So that’s what the name is. Give it a description so it can either be the same or something that’s more verbose to tell you about the description of…or the type of fee or charge that you’re incurring.

The Action refers to how is the fee going to behave when you’re presented with the fee on the…at the time that you add it to the order. You can configure this to either accept an amount that you type at the time that you create it. That would be a Fixed amount action and it would be…leave this amount field blank because you want to leave it blank if you want to be able to put whatever fee or whatever amount you want at the time you add it. If you wanted it to always have the exact same amount, then you can prefill it. So, if you wanted it to always be $150, then you would put an amount in, but you would not put this amount here if you want to be able to change it at the time that you add it. So that’s a tip on that. Now the other option here for a fee would be something like a % of the sub-total, which means Finale’s going to do a calculation of the sub-total or the percentage that you type in. So, if you wanted to make this a percentage type of fee, then you could select % and then you would specify the percentage. So maybe this is a 15% fee is what this would signify. So that’s an explanation on these different action amounts. So Fixed amount is typically the most common and also leaving the amount blank is the most common use factor here.

Now, a lot of things also with these adjustments and fees with purchase orders and sales orders…Finale has a pretty advanced accounting system. So, we do what we call landed cost or allocating the cost back to the units you put on the purchase order or allocating revenue and fees on your sales orders in revenue. So, this Allocated by gives you the option to set up how the fees are allocated back to the actual items. Now, you don’t have to allocate. This is an example of all these fees are being allocated. So, for instance, if you’re not going to allocate the freight back to the cost of the units, you’re just going to expense the freight. You would want to create a second fee for maybe freight or shipping. So, you could create one that doesn’t or that is not allocated. And so, you would just set this up as maybe Fixed and don’t allocate. So not allocating is basically not rolling the cost of this fee back into the units that you purchased on a purchase order.

So kind of giving you an idea of where you would go to set these up. Again, reminder, it’s in Application settings and then it’s related to either your Purchasing or your Selling under the Adjustments.

Now, let’s go see how and where we apply these. So, if we go to the Purchases, you will see I’ve got two purchase orders here. One is fully received. One we’re going to use here in this test. So, let’s check out this one that we’re going to add at these discounts or fees. Where does this appear? It’s right here below the line items. So, Finale always calls these line items of the orders. This is the area where you add inventory items. So either the inventory items that you are buying or the inventory items you’re selling in relation to a sales order.

Here on the purchase order, if we need to record some fees that we incurred in bringing these products to your warehouse or into your business, you can see that we’re individually, you know, recording that we’re ordering 50 at 30, 65, at 15. So, we have a total cost. So, this is only the cost of the products. So, what about if we get charged freight? So, you would add that here under Edit discounts and fees. Here is where you’re presented with a way to add the adjustment. And again, if you don’t have any set up, you can quickly access the application settings and go set some up. But here is where I want to add one. So, if I want to add one, it just defaults to the first one in the list. So, if you don’t want a Customs Adjustments, then you can choose…hey, I’m going to do Freight. So, if I’m doing freight, I’m just picking out the prefilled or the preformatted adjustment. And so here, I might record that I was charged $250.36 for freight.

And so when you’re done here, you can hit the save button. If you make a mistake and you want to delete this, you can just hover over it and then hit Delete and add another one. You can add more than one. So, you can choose whichever one you want. So, if I want to add some Insurance fees, I can do that and maybe record that as well.

So as I make my adjustments to the purchase order, I can go back to the purchase order. Just follow the links at the top and you’ll see where we are adding the freight cost and the insurance cost and it’s totaling up just like you would expect it to. Now I picked two particular ones that are allocated cost. So it’s showing you a difference in the subtotals on the line. So remember, the straight-up cost for just the products is the quantity times the rate which is the price here. So that’s $1,500. But if you add or allocate back these fees back into these units here, then this would be the total cost for these items in relation to how they’re being allocated.

And again, if you need to add more or you need to make an adjustment, you can come here. A lot of people ask about what’s this No preset applied. If you choose No preset applied, it basically allows you to just freeform create one. So meaning it doesn’t have a name. I can come here and give it a description, My Fee. And you’re just going to type in an amount. So I can make it up. And I’m just doing it on the fly. And if I don’t want it allocated or allocated, I can just choose how I want to do it. So this one’s going to be just a freeform fee. I can do this. And I can actually save this.

Now you’ll see how this appears. It’ll come over here and say it’s just My Fee. I just made it up. I didn’t add it in. So it didn’t add it in over here. You could actually look out here and see what’s being allocated back and the fees that aren’t, you know, that aren’t being included.

But a word of advice about the freeform fees. So when you use a fee that’s not a preset, so if it has no name here, it means it’s being unidentified. So the word of caution here and that is when you do reports, it’s not going to be broken out into its own category because you did not give it a preset. So you’ll still be able to see it in reports, but it’ll be consolidated into something just called miscellaneous fees. So you won’t know why you added the fee if you didn’t use a preset. So that’s just a tip if you do that. So it’s always best to create your presets when you think about them, if they’re going to reuse them.

So to kind of recap. We’ve gone over where you, you know, where you create these. You create these in Application settings, and you add them to the orders using this link. Now also remember, sometimes if you’ve got your purchase order in a completed state, if you’re trying to come back in because you forgot to add a fee, if you attempt, you can’t add them. So you can’t add them in with the order in a completed state. So you’ll need to revert the order back into an edit state and then you can make adjustments. So you could come back here, you could hover and remove this fee and get it back or add a different one, change your mind. Make sure you’re in the edit mode. So all of this is the same no matter if you’re doing this for purchase orders or sales orders. The procedures are the same.

So we can jump back over to Application settings. You can review your purchasing, your adjustments and see how to set these up. And it’s the same for Selling. So you would see the same particular type of setup for when you’re doing adjustments on the selling side.

Now, there’s one other thing on the selling side that I want to point out. So like when you set up an adjustment, you have the same features here. It’s fixed or percentage, whether you’re allocating or not allocating. You can also change where the fees are going to be hitting in terms of the general ledger. So Finale does have some pretty good accounting structures behind it. You would set up these accounts in your Application settings Accounting tab and this is kind of giving you the ability to book it into a very specific chart of account. If you don’t set this up, it’s okay. It’s just going to default to the default expenses. Okay? Or the default freight account. So that’s where it’s going to go if you don’t touch these. So if you want to get in and you can get real specific, you’d have to create your other accounts and then you’d have to set these up individually.

Another thing to know is how do we handle the tax handling on a fee that you set up for sales. So is it going to be taxable or is it not taxable? Okay? And then you’re going to see one other option and that is it an actual tax. So in other words, this is referring to how we’re going to categorize it for reports. So if you choose something that’s nontaxable, it’s going to be considered to be in the section of nontaxable fees on the order, which means no tax would be applied to the fee. But also, you could choose it to say, “No, this is a tax.” So if it wasn’t a sales tax but it’s a tax, then you could actually declare it that it is a tax so that in our report structure, it would report it in addition to the sales tax in a tax category is what we want you to understand. So this really is where it’s appearing in the reports, to know what’s going on there.

So that’s the tip on how to use or add discounts and fees and taxes to your sales orders. Now, the tax here would not be where you would do typically a sales tax. So if you’re going to do a sales tax, that typically is added here in a Calculated tax. So calculated taxes are where you would add a true sales tax. So if you had a city sales tax or a state sales tax, you would add these here. So if you had, you know, a state tax here, you would do that. You could set up the rate. And this is where Finale would add that as an option to a sale. So you could default that it uses this sales tax on all orders that you create or don’t default it so you have to pick it and actually add it to the sales order yourself.

So that’s it. That’s as easy as it is to add discounts and fees to your orders.