To improve the invoicing process and ensure consistency, tax rates are now managed through a centralized system in Productive found in the invoicing settings.
The Tax rates feature allows users to select predefined tax rates from a dropdown menu rather than manually entering them for each invoice.
Setting Up Tax Rates
Adding and Editing Tax Rates in the Settings
Navigate to Settings > Invoicing > Tax rates to add or edit tax rates.
Note on permissions: only admins have access to these settings.
If you previously issued invoices through Productive, all previously utilized tax rates associated with your subsidiaries will be moved here. Moving forward, you can add new ones or archive any outdated rates you do not wish to use anymore.
Editing a previously used tax rate (changing the subsidiary, the tax name or the value) will trigger a notification saying "Can't modify if tax already applied to invoices," indicating that you can't change it.
It is recommended to either archive it or create a new tax rate for the subsidiary in question.
Important: Each tax rate is linked to a specific subsidiary, meaning that you can only apply tax rates associated with the subsidiary issuing the invoice.
If you have multiple subsidiaries with various tax rates, make sure to add all tax rates and match them to the appropriate subsidiaries in the settings.
Important to Note:
You can create single-component or multi-component taxes (e.g., dual-component tax). To add a component, select the "+ Add component" in the bottom left.
Since adding a tax rate to an invoice line item is mandatory, if you need to omit the tax in certain cases (and do not want the invoice to display "0% tax"), you can create a tax rate with just a name, leaving the tax name and percentage fields empty.
Check out this article to learn how to manage no-tax items in invoices.
Once finished with adjusting all the details, select Save, and your tax rate will be ready for use!
Here is a checklist of all tax rate properties:
Tax rate name: The name of the tax rate you want to include in your invoice.
Subsidiary: The subsidiary for which the tax rate can be used.
Tax name: The name of each tax component.
Value: The percentage of the tax.
Setting a Default Tax Rate for Your Company and Subsidiaries
You can set a Default Tax Rate for each subsidiary in Settings > Company Info > Subsidiary.
The “Default Tax Rate” field includes a dropdown with all tax rates created for the subsidiary in Settings > Invoicing > Tax Rates.
Note: If the default tax rate is archived, a warning will appear.
The selected default tax rate for the subsidiary will pre-fill the tax rate field on invoices, deals, budgets, and deal and budget proposals if no default tax rate is set for the associated client company.
Applying Tax Rates in Invoices
Selecting Tax Rates
When creating an invoice, a dropdown menu appears just below the subsidiary picker, allowing you to select the tax rate.
Choosing the subsidiary will automatically pull all tax rates you created for that subsidiary.
By default, the selected tax rate applies to all line items in the invoice. However, you can change the tax rate for individual line items by choosing it from the dropdown.
As you change the tax rates, the invoice subtotals and total will adjust. Note that if you change a tax rate for a single line item, you'll need to confirm it by selecting Save in the lower left.
Bulk Editing Tax Rates
On the invoice screen, you can change the tax rate for all line items simultaneously by selecting the main Tax rate dropdown located at the top of the tax column.
Automatic Invoice Settings
Once you draft or finalize an invoice, Productive will remember the settings you used.
Next time you start creating an invoice for a client you already invoiced, Productive will preselect invoice settings based on the previous invoice drafted or sent to the same client.
What's Copied?
Preselected settings from the previous invoice for the same client include:
Applying Tax Rates in Budget and Deal Proposals
To adjust the tax rate in your PDF proposal, whether it’s from a budget or a deal, start by opening the budget or deal sidebar.
Next, select the Document information tab and click on "Edit document info".
A popup will appear where you can choose your preferred document template, which determines the PDF’s visual appearance and the tax rate.
After selecting the template and adjusting the tax rate, you can add a custom note to the proposal if needed. Once all changes are made, click Save in the bottom left corner.
Please note that the available tax rates are determined by the ones you created and assigned to the subsidiary associated with the budget!
After saving, proceed to export the file by selecting the "Export proposal PDF" option.
Managing Tax Rates
Active and Archived Status
Active
Tax rates with this status can be added to invoices. You'll see all your active tax rates listed in Settings > Invoicing > Tax rates.
From there, you can edit, duplicate or archive the tax rate by selecting the three-dot menu to the right of each tax rate.
Note that if you already applied the tax rate to an invoice, you cannot edit it retroactively, instead, if needed, duplicate the rate, make any changes, and save it as a new one.
Archived
You can archive a tax rate from the three-dot menu, and later access and activate any archived tax rate if you select "Show archived" in the bottom left.
Archived tax rates cannot be added to new invoices. However, archived tax rates remain on all invoices where they were previously assigned.
When editing an invoice with an archived tax rate, a warning will appear, but changes to the invoice can still be made.
If you try duplicating an invoice with an archived tax rate, a notification will warn you and prompt you to select a new tax rate for the new invoice.
