So you want to keep track of sales tax (like the HST or GST in Canada) with Hubdoc + Xero? Now you can with our updated integration to Xero. Read on for step-by-step instructions.
Step 1. On the Destinations page of your Hubdoc account settings (where you initially connected to Xero), you will see an awesome little check box that says Publish Tax Data. Check that box!
Step 2. Select your Default tax rate. This is the one you use most frequently. For instance, Hubdoc is based in Ontario so we selected HST 13% as our default tax rate. Note: The tax rate can also be set at a vendor level.
See the screen cap below so you know where to find these settings.
Step 3. Start using our awesome tax functionality. But how?
Step 4. Close the Manage Accounts/Destinations screen and navigate to a bill or expense in Hubdoc. See the screenshot of the Sobeys bill below. Wow, the Hubdoc team eats a lot of almonds and fruit.
Step 5. Hubdoc has extracted the date (June 8, 2015), the vendor (Sobeys) and the amount (57.78). It is up to you to figure out what to do with the tax. You can either select a tax rate to apply to the Total Amount or enter in the Extracted Amount. In this case, the tax is $1.33 which you will notice is not a flat 13% like most transactions in Ontario. So instead of just selecting the tax rate, we have selected Extracted Amount and entered $1.33. Notice that Hubdoc calculates the Net Amount of $56.45.
Step 6. Publish to Xero. Code the Sobeys bill using Hubdoc vendor rules (instructions here) and then hit Publish. Watch the magic happen. Here is what the transaction looks like in Xero. Note that Hubdoc has created two line items in Xero to achieve the goal of getting the transaction to calculate $1.33 of tax paid.
Works like a charm!
We hope you enjoyed this article about enabling taxes in Hubdoc!