Tax Settings and the ConnectWise to e-automate sync – CEO Juice

When invoices are created in ConnectWise and synced to e-automate using ID964, the tax amount billed in ConnectWise does not sync. The sync only uses the taxable option on the addition for the agreement to determine if the item will be taxable in e-automate. The amount of tax that is billed in e-automate when the contract invoice is created is dependent on the tax codes and tax authorities in e-automate.

Contract Settings

There are two main tax settings on the contract that are updated by ID964: the tax code on the contract and the option to use equipment tax codes.

Contract Tax Code

On the contract, the tax code is set on the Billing/Contact tab. For the contract to bill tax, there needs to be a billable tax code entered, and the Taxable box must be checked.

Billing and contact tab of the EA contract with the tax code and taxable option highlighted

These two settings will default to the customer settings when the contract is created.

The tax settings are on the customer record, on the billing tab. This is where the tax code and whether the customer is taxable are set.

These settings are not touched on updates by the sync, so if they need to be changed, you can do so.

Use Equipment Tax Codes

The option for 'Use equipment tax codes' is copied from the contract template used to create the contract in e-automate. When the contract templates are created during the preflight process, this option is checked by default. If you do not want to bill tax based on each item on the contract, you can uncheck this option on the template, and it will not be copied over to the contract created from that template.

Billing and contact tab of the EA contract with the option highlighted to use equipment tax codes

If this option is unchecked, the tax code set on the contract will be applied to all items on the contract.

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Contract Line Item Tax Settings

At the line item level, the sync determines which items should be taxable based on the taxable status of the addition on the agreement in ConnectWise. You can also specify locations for each addition on the agreement if the customer needs to have different items charged different tax rates based on location.

Override Taxable Settings

For items to be eligible to be taxed in e-automate, the additions on the agreement all need to be checked as Taxable:

Example of an addition from CW that does not have the Taxable option checked on the addition

If this option is NOT checked on the Addition product ID, the sync will check the Override taxable check box on the item on the contract in e-automate:

Example of an EA item on a contract that has the override taxable option checked. The sync checks this box when the additon is marked as not taxable in CW

Examples:

The taxable option is checked for the addition in ConnectWise. When the line item syncs to e-automate, the Override taxable option will NOT be checked.
The taxable option is NOT checked for the addition in ConnectWise. When the line item syncs to e-automate, the Override taxable option WILL be checked.

When the Override taxable option is checked on the line item, no tax will be charged for that item, regardless of the other tax settings in e-automate. To make sure that this box is unchecked in e-automate, you'll need to verify that the taxable option on the addition in ConnectWise is selected. The taxable default for a product is set on the product; this can be overridden on the addition.

We'd recommend setting all the products in ConnectWise to be taxable and then handling exceptions using the tax code setup in e-automate.

Location Tax Codes

Depending on how the agreement is billed and the customer requirements, you may need to charge different tax codes based on different customer locations in e-automate. To do this, you'll first need to set up the location linking for ID964 to assign the matching location number at the item level on the contract.

When the location linking is set up, the sync will set the tax code on the line item to match the tax code from the location customer:

The tax code at the item level of the contract is set based on the location customer set. When the location linking is in place, the location customer will be updated to the actual location instead of the main customer.

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Tax Codes and Tax Authorities

The tax billed on the e-automate contract invoice is tied to the tax authority on the contract and the tax category that is on the contract base distribution code.

Every tax code in e-automate is made up of tax authorities; you can have multiple tax authorities on one tax code. The tax authority determines what to charge tax on, based on the tax flags that are added:

Tax authority in EA showing the tax flags that the authority is set to charge tax on

Each contract distribution code has a tax category listed:

The tax category used for each item on the contract is set on the base distribution code.

In order for the contract to charge tax, the tax category on the base distribution code needs to match one of the categories to tax that is listed on the tax authority.

Example:

The base distribution code is set with a tax category of ITEM. The tax authority for the tax code set on the item is set to charge tax for the tax flag ITEM. The item on the contract has the override taxable option checked. No tax will be charged when the contract is billed due to the override taxable option being checked.

The tax as value for the item is determined by the base distribution code:

The tax authority is determined by the tax code on the item:

The tax authority is set on the tax code for the item. The tax authority is where the tax flags to charge tax for are set

When the override taxable option is checked on the item, no tax is charged.

For this same scenario, if the override taxable option was not checked, then the item would bill tax when invoiced.