Overview

Customers often prefer all-inclusive pricing. iVendNext supports Tax Inclusive Accounting, showing clear final prices while staying tax-compliant. This guide explains the concept and setup process.

1. What is Tax-Inclusive Pricing?

Tax-inclusive pricing is a pricing strategy where the sales tax is included in the displayed price of a product. Instead of showing the base price and adding tax at the checkout, the customer sees a single price that already includes the tax. This approach is commonly used in retail environments to simplify the purchasing process for customers.

Example:

• A product is priced at $100, including a 10% tax.

• The customer pays $100, and the tax amount (approximately $9.10) is included in the price.

2. Benefits of Tax-Inclusive Pricing

• Customer Transparency: Customers see a clear, all-inclusive price, reducing confusion at checkout.

• Simplified Pricing: Eliminates the need for separate tax calculations during the sales process.

• Compliance: Ensures that tax-inclusive pricing is accurately reflected in financial records and invoices.

• Improved Customer Experience: Enhances the shopping experience by providing straightforward pricing.

3. How to Configure Tax-Inclusive Pricing in iVendNext

iVendNext makes it easy to configure tax-inclusive pricing through the Sales Taxes and Charges Template. Here’s how you can set it up:

3.1 Prerequisites

Before configuring tax-inclusive pricing, ensure that:

• The Sales Taxes and Charges Template has been created.

• The tax rate for the relevant tax (e.g., GST, VAT) has been defined.

3.2 Steps to Configure Tax-Inclusive Pricing

1. Navigate to the Item Tax Template:

• Go to Home > Accounting > Tax Masters > Item Tax Template.

2. Edit the Tax Template:

• Select the tax template you want to configure for tax-inclusive pricing (e.g., "GST 10%").

• Click on Edit to modify the template.

3. Enable Tax-Inclusive Pricing:

• In the tax row, expand the details by clicking on the Expand button (usually represented by a small arrow or plus sign).

• Check the box labeled "Is this Tax included in Basic Rate?".

• This ensures that the tax is included in the item’s base price.

4. Save the Template:

• Click Save to save the changes.

3.3 Example of Tax-Inclusive Pricing

Scenario: A business wants to sell a product for $100, including a 10% GST.

Steps:

1. Create a Sales Taxes and Charges Template for 10% GST.

2. Enable the "Is this Tax included in Basic Rate?" option in the template.

3. When the product is sold for $100, the system will automatically calculate the tax-inclusive price, ensuring that the customer sees a single price of $100.

4. How Tax-Inclusive Pricing Works in Transactions

When tax-inclusive pricing is enabled, iVendNext automatically adjusts the calculations to ensure that the tax is included in the item’s price. Here’s how it works:

• Item Price: The price displayed to the customer includes the tax.

• Tax Calculation: The system calculates the tax amount based on the inclusive price and deducts it from the total to determine the net amount.

• Invoice Display: The invoice shows the total price, with the tax amount broken down separately for accounting purposes.

Example:

• Item Price (Inclusive of Tax): $100

• Tax Rate: 10%

• Tax Amount: $9.10 (calculated as $100 / 1.10)

• Net Amount: $90.90

5. Key Considerations for Tax-Inclusive Pricing

• Tax Rate Changes: If the tax rate changes, ensure that the tax-inclusive pricing is updated accordingly to avoid discrepancies.

• Multiple Taxes: If multiple taxes apply (e.g., GST and VAT), ensure that all taxes are included in the tax-inclusive price.

• Reporting: Ensure that your financial reports accurately reflect the tax-inclusive pricing for compliance and auditing purposes.

6. Important Points To Remember

Some of the key points to remember are:

• Clear Labeling: Clearly label tax-inclusive prices in your store and on invoices to avoid customer confusion.

• Regular Reviews: Regularly review and update tax-inclusive pricing to ensure compliance with changing tax regulations.

• Testing: Test tax-inclusive pricing in a controlled environment before applying it to live transactions.

• Training: Train your sales and accounting teams on how to manage tax-inclusive pricing effectively.