Teacher Created Materials
July 27, 2015
This week is a big change for me as I spent most of the time preparing and filing sales taxes. We sell our products to individuals, re-sellers, and schools throughout the States, and we have to pay sales tax for selling to individuals but not re-sellers and schools. What makes this task difficult is that each states has different policies about tax rates: some states have a definite sales tax rate, some states have different sales tax rates for different counties and different cities, some states even have different sales tax rates for each small region within a city. And of course, sales tax is required in different periods, which varies monthly, bimonthly, quarterly, semi-annually and annually. What diversity!
The process of preparing data is basically the same:
- I use Microsoft Access to pull out the data: every order shipped to a particular state during a particular period of time. For example, every order shipped to Nevada between 4/1/15 to 6/30/15 (2nd quarter).
- Copy the data into Excel and start preparing data by adding some columns. First I will add Tax Class, which identifies whether the order is for an Individual, a Reseller, or a School. I have the order code which does the identification, yet sometimes I have to classify some orders myself according to what I can see or find. For example, a person made a purchase and the system shows as for Individual, yet the “Ship to Attention” shows a school’s name. Thus that should be an order from a school and should not be charged tax. Some cases are harder to determine. A lot of time I would find an order that is for a large amount but classified as Individual, which is unreasonable; however I cannot find any information that it’s shipped or sold to a school or a reseller. So I look up the person’s account number in the system, find the address, look up the address on Google (thank you, Google), and oftentimes I would find a school’s address. As Jared said to me, we should use our best judgement, be careful and honest with data that we have and date we can find.
- Then, as I have classified all the transactions, I will classify them as Taxable or Non Taxable. After that I do a quick total up, and create a Pivot Table. Pivot Table is a really powerful tool for filing Sales Tax. Now I’m done preparing the data.
- After having the data in my hand, I start to specialize the data basing on each state’s requirement. Again, for some states I can simply multiply the taxable amount with the definite tax rate. For some states I have to look up the tax rates table for each county and city, alter the Pivot Table and calculate the total amount basing on each county’s tax rate with its taxable amount.
- Lastly, I will either file the sales tax form online or mail them out. Phew!
Another big thing I did this week was going through an audit with the whole Accounting department. An audit is necessary to check the accuracy of our database versus what we physically have, our honesty as an organization and our ability to keep track and record activities among the company. One of the activities I did was to do Invoices Shipment auditing, in which the auditor chooses some invoices and requires:
- Copy of invoices (that you can reprint from the system)
- Copy of the Purchase Order
- Copy of the Proof of Delivery
- Data whether the invoice is paid or not
This part of Auditing is to prove that we do deliver our product properly, in full and in a timely manner. Of all four requirements, Proof of Deliveries (POD) have been the hardest to find. It’s because we use many shipping companies, the amount of orders vary, and sometimes there are international orders that are harder to keep track of (for example, an order from Australia would receive product from the printer from, for example, China, and thus keeping track of the POD is harder). We managed to gather all the information anyway. It’s just hard to know who would have the information, and Jared is excellent in terms of knowing the suitable personnel to contact for the information.
Another part of the audit is inventory count. We have to match our physical inventory with the inventory amount we have in the system. Jared, I and the Auditor spent 2 hours in both warehouses to count either books or boxes of books. Other parts of the audit require information from both A/R and A/P, which Sheila and Vanessa were able to provide easily. I can see the great importance of storing information to keep track of the company’s business and activities, and the way we store the information is vital so that it’s easy to locate.
Tom is an Economics & Business major from Hanoi, Vietnam.