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How to check if a Bad Debt has Tax Rate associated with it when I run the Account summary report without including Taxes?
Bad debt is the sum of the credit notes that has reason code as write off. Bad Debt details can be found in the Invoices report under the column: Write-off Amount
Note: The value in this section will differ from the bad debt column in Account Summary based on whether the option to include Tax was checked in the Account Summary section or not as displayed in the image below.
In the above Account Summary, the bad debt value for the month of Dec-2019 is $287.04 with taxes included. If you uncheck the “Show amounts after the tax is applied” and “Show amounts after the discount is applied” then your bad debt value shall be represented as $254.02.
In the above example, the tax component value is 13%. For the Invoice, of $288~ (i.e. the bad debt for the month of Dec 2019 as mentioned in the image below) the write-off amount shall be written as $287.04 while the associated bad debt in the Account Summary shall be mentioned as $254.02. This is because the 13% tax component is not included in the bad debt and was unchecked at the Account Summary section.
$254.03* (1.13 + (13% Tax)) = $287.04
To check whether the bad debt has tax rate associated with it, filter by Invoice Number in the line items, and check column-M if the tax rate has been defined or not.
For example, for the Invoice number: 228, the tax rate has been defined as 13% in Column-M.