Managing multiple tax obligations and currencies is no easy feat for businesses and accountants serving them, especially with constantly shifting global tax rules and fluctuating currency rates. <\/p>\n\n\n\n
Enter Synder. The tool\u2019s multi-tax and multicurrency functionalities are designed to steer through these challenges and make sure those complex issues are easily handled with automation. By offering seamless integrations with popular accounting platforms like QuickBooks Online and Xero, Synder ensures that businesses can maintain accurate records, achieve tax compliance, and manage multicurrency transactions efficiently. Let\u2019s explore these functionalities and dive deep into how Synder can help Canada-based businesses work with taxes and international transactions.\u00a0<\/p>\n\n\n\n
Synder calculates sales taxes based on the sales total amount and the tax amount it receives from various payment processors like Stripe, Square, PayPal, and more. Using this data, Synder calculates the tax rate and matches it to the respective tax codes in your QuickBooks or Xero accounts.<\/p>\n\n\n\n
The majority of US QuickBooks users benefit from an automated sales tax feature. This feature determines the applicable sales tax based on the address of the sale or company address. In this situation, Synder only marks products as taxable or non-taxable, based on the tax information provided by the payment processor. The tax percentage is calculated by QuickBooks Online.<\/p>\n\n\n\n
However, in cases where businesses prefer Synder to do the tax calculations instead of QuickBooks, they can activate this feature in the app. Once activated, Synder will take care of all tax calculations. If you\u2019d like the tax to be included in the sales total, you\u2019ll need to disable this feature.<\/p>\n\n\n\n
Synder offers a dynamic range of tax settings for its Per Transaction sync mode. You can approach taxes in two ways:
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Option 1:<\/strong> You can either record all the taxes as line items in your sales receipts or invoices and post them to a common liability account. After this, you can use any third party tool (such as Avalara, TaxJar, etc.) to calculate tax details and manage tax filing.<\/p>\n\n\n\n Option 2:<\/strong> Alternatively, you can let Synder transfer all the tax amounts from your sales channels to the books and allocate them properly. In this case, QuickBooks will be a source of truth for tax filing. In order to make this work, taxes on both the QuickBooks\/Xero side and taxes on the payment processor side should be set up. After that, Synder will be able to take tax information from the sales channel and match them with QuickBooks\/Xero tax codes. In this case, your accounting system will show all taxable totals and all tax reports correctly.<\/p>\n\n\n\n This functionality works by default without any additional setup on Synder\u2019s side. The app will simply get a tax amount from a sales channel and then start looking for a matching tax code in QuickBooks. However, let’s explore the details of the tax tracking options available with Synder, to see how it can cover oversimplified or very complicated cases.<\/p>\n\n\n\n If you don’t yet have a specific tax percentage set up in your accounting software based on your payment processor info, you can use Synder’s default tax code setting. This way, you\u2019ll protect your books from failed transactions if the necessary tax code with the percentage is missing in your accounting system.<\/p>\n\n\n\n Additionally, if the tax amount from the payment processor is $0, Synder’s zero-rated tax code can be utilized. This setting will help you record the tax as 0.0% instead of Exempt, which helps you make sure everything is recorded correctly.<\/p>\n\n\n\n You can set the settings so that a specified tax code is applied to all your transactions once they get into your QuickBooks or Xero account. This setting may be used when you want this tax code to override the existing taxes from your payment processor, or when you want it to be applied to non-taxable transactions only.<\/p>\n\n\n\n If you sell and ship to provinces where the shipping charges are taxable, you can use Synder settings as well to set up a tax on shipping. <\/p>\n\n\n\n Synder will assign tax code from QuickBooks based on the matching percentage. However, when multiple tax codes have the same percentage, it may be tricky to identify the needed tax. In this case, Synder uses some additional parameters to find the needed tax code. In case the sales channel doesn\u2019t provide the needed information about taxes to identify the right tax code, Smart Rules can come into play. For businesses with both domestic and international sales, Synder’s Smart Rules engine is a game changer. This functionality allows users to apply varying VAT rates depending on the sales destination, be it Canada, the UK, EU, US, or other countries. Note that as of now Synder’s Smart Rules are exclusively available for the QuickBooks Online accounting platform .<\/p>\n\n\n\n The process is simple:<\/p>\n\n\n\n For example, you can create a flow to manage the sales tax for your Canadian sales in QuickBooks: if the receipt includes Quebec in the shipping line, then in QuickBooks, the tax should be applied to Quebec. This way you\u2019ll be able to file Canadian taxes correctly. <\/p>\n\n\n\n Discover <\/em>how Synder helped QUANTU record and file Canadian taxes correctly<\/em><\/a>.<\/em><\/p>\n\n\n\n Before Synder can work its magic, businesses need to ensure their accounting software is ready to handle multicurrency operations.<\/p>\n\n\n\n Note that to synchronize multicurrency transactions with Synder, you should be on a Medium, Scale, or Large plan. Without this, only transactions in home currency will be recorded in your accounting. For example, if you\u2019re operating your business from Canada, only CAD transactions will appear in your records, and transactions in other currencies won\u2019t be synchronized.<\/p>\n\n\n\n Once the Multicurrency feature is activated both in your accounting system and Synder, you\u2019re ready to handle international transactions in two ways. You can choose to record the said transactions in your home currency (assigning all transactions to a single account), or in their original currency (routing transactions to dedicated accounts per currency).<\/p>\n\n\n\n Upon connecting Synder to your accounting software (like QuickBooks Online or Xero), it auto-creates a ‘clearing account’ in your primary or home currency. This could be labeled after payment platforms, for instance, Stripe or PayPal, as mandated by Synder.<\/p>\n\n\n\n All transactions, irrespective of their original currency, are funneled into this singular account. Synder uses the exchange rates from payment platforms for conversions. However, if this data is missing, the tool defaults to the built-in plugin exchange rates of the accounting software based on the date of the transaction.<\/p>\n\n\n\n For example, Synder will sync transactions in CAD if payouts from different currencies are deposited into a single bank account in CAD.<\/p>\n\n\n\n The beauty of this approach lies in its simplicity. By default, all transactions route into one account, eliminating the need for additional setup. Users simply need to sync transactions across multiple currencies to see this in action.<\/p>\n\n\n\n For businesses that maintain multiple bank accounts, especially when receiving payouts in different currencies, Synder provides the flexibility of dedicating specific accounts for individual currencies.<\/p>\n\n\n\n Here’s how it works:<\/p>\n\n\n\n This way, Synder will sync transactions in their initial currency.<\/p>\n\n\n\n With the continuous expansion of ecommerce and international sales, having an effective tax management system and reliable multicurrency management is crucial. These tasks don’t have to be daunting challenges anymore, as they can be effectively handled by smart automated software. With Synder’s seamless integration and robust features, businesses and accountants serving them can effortlessly keep their books accurate and up-to-date, irrespective of the myriad currencies they deal in. <\/p>\n\n\n\n Synder offers a versatile and powerful solution that addresses these challenges head-on, ensuring that you can focus on growth while it takes care of the nitty-gritty tax details and multicurrency issues.<\/p>\n\n\n\n Discover the full potential of Synder by signing up for a <\/em>15-day free trial<\/em><\/a>, or hop on <\/em>Synder\u2019s weekly educational webinar<\/em><\/a> to see how everything works and ask questions. Optimize your processes and work smarter!<\/em><\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":"Managing multiple tax obligations and currencies is no easy feat for businesses and accountants serving them, especially with…\n","protected":false},"author":2237,"featured_media":16986,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"footnotes":"","_ppma_block_editor_authors":""},"categories":[45,70,342,251],"tags":[255,254,64],"ppma_author":[392],"class_list":["post-16984","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business-management","category-ecommerce","category-synder-for-accountants","category-use-cases","tag-business-owner","tag-cpa","tag-synder","cs-entry","cs-video-wrap"],"yoast_head":"\nDefault tax code<\/h5>\n\n\n\n
Zero-rated tax code<\/h5>\n\n\n\n
Generic tax code<\/h5>\n\n\n\n
Tax on shipping<\/h5>\n\n\n\n
Applying VAT based on sales location<\/h5>\n\n\n\n
Using Smart Rules, you can set the conditions for applying a certain tax yourself. For example: if the product is \u2018X\u2019 and the shipping address contains \u2018y\u2019 in the province name, apply tax code \u2018Z\u2019. This way Synder will be identifying the tax codes based on these rules. <\/p>\n\n\n\n\n
How Synder works with multicurrency<\/h2>\n\n\n\n
The prelude: Prepping the ground<\/h3>\n\n\n\n
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Synder\u2019s approach to multicurrency synchronization<\/h3>\n\n\n\n
a. Assigning transactions to one account<\/h4>\n\n\n\n
b. Channeling transactions to dedicated accounts per currency<\/h4>\n\n\n\n
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Conclusion<\/h2>\n\n\n\n