At FranConnect, we are consistently improving our product to assist our customers in improving business efficiency. Effective May 4, 2023, customers will be able to add tax calculations to specific agreement or line items. In this article, we will walk you through how to use this new feature.
Configuring a New Tax Type
To add tax calculations to line items, first navigate to the Admin section by clicking the gear icon at the top of the page. Then, click Finance on the left-hand sidebar.
Next, click Configure Tax Rates.
Next, click the Tax Types tab and then click Add Tax Type.
Give your tax a name and a description. Then, select whether it is a positive or negative tax.
Click SAVE when you have determined that the information you have entered is correct. Next, navigate to the Tax Rates tab and click Add Tax Rate.
Give your new tax rate a name and description. Select the tax type you just created from the "Tax Types" drop-down menu. Next, enter the tax rate as a percentage in the "Applied Value" field and choose the agreement or line items to which you wish to apply the tax.
Mapping a Franchise to a Tax Rate
To map a franchise to the new tax rate, click the gear icon next to the tax rate we configured in the previous section. Then select View/Map Franchises from the drop-down menu.
Note: You can only map a franchise with one set of tax rates.
From this page, you can view the details of the tax rate that has been configured, as well as the franchises to which it has already been mapped.
Additionally, there are three drop-down menus that can assist you in finding franchises to map to a tax rate.
Franchise ID: You can search for a franchise by their franchise ID in the FranConnect system.
Tax Rate: You can search by the tax rate that is currently mapped to a franchise or group of franchises.
Country: You can search for all franchises located in a given country.
You can also click the View All button on the bottom-right of the page to view every franchise in your system.
Note: In our example, we are searching for all franchises located in Australia, but the following procedure will be roughly the same regardless of the search you performed.
There are two possible categories of results in the search output:
- Franchise(s) currently not mapped to any tax rate
- Franchise(s) currently mapped to other tax rates
Note: Mapping these franchises to the new tax rate will remove them from any tax rates to which they are currently mapped.
Once you have narrowed down the franchises you wish to add to the new tax rate, check all the franchises that apply in the search results. If every franchise applies, check the checkbox at the top of the search output to check all franchises.
Once you have confirmed that the franchises you have selected are correct, click Map to finish the tax rate mapping.
You can confirm that the tax rate has been successfully mapped to a franchise by clicking Finance on the left-hand sidebar and then selecting Royalties from the drop-down menu. Open an invoice for a location added to the new tax rate and you will see the new rate reflected on the invoice.
Enhancing Tax Calculation Precision
In the United States, tax rates may be calculated with a precision of up to three decimal places. Within the FranConnect system, when an administrator configures decimal place settings, these changes are applied globally across all aspects of the Royalty Manager module. To accommodate this specific requirement, it is necessary to grant administrative users the capability to configure decimal places independently for tax calculations. This tax-related decimal configuration will supersede any global settings exclusively within the tax domain, while in other areas, the decimal places will continue to adhere to the overarching global configurations.
Having read this article, you should be able to create and configure a new tax rate and apply it to specific franchises, agreement items, or other line items.