Tax handling should account for rate changes between proposal and invoice

The need

Sales tax on a signed proposal is fixed at the rate that applied when the proposal was drafted. On projects that run for weeks or months, tax rates can change before the work is invoiced. When the rate at invoice time is higher than what was quoted, the integrator generally absorbs the difference, because renegotiating tax on a signed contract is not realistic. On large projects even a small rate change accrues to hundreds or thousands of dollars.

The same gap affects recurring billing. Service plans and monitoring agreements continue to bill at the rate captured when the agreement was created, even after the jurisdiction has changed it.

What we are planning

Tax will be brought up to date at the point the work is invoiced, so the amount billed reflects the rate actually in effect rather than a rate captured months earlier. Where that produces a change from the figure shown on the proposal, the change will be recorded and visible, so it can be explained to a customer if asked. Where a current rate cannot be retrieved, the invoice will clearly indicate that the tax figure could not be verified rather than failing silently.

You will also be able to refresh tax rates on demand, rather than waiting for the system to do it.

What will not change

Prices accepted by your customer stay as accepted. Only the tax figure is refreshed.