How to apply credit/deposit without affecting tax?

[The_White_Hart]

Sometimes a customer will pre-pay a small deposit, and pay the full bill later. 

If I enter this as a $ credit, it affects the sales tax because Square Register calculates all credits before tax, not after. I can't see any way to credit the customer's pre-payment without also screwing up the tax line. 

Any suggestions? 

[EJ_]

Hi there. 

 Currently, Square doesn’t offer support for pre-authorizing cards or collecting security deposits.

It's not something on our roadmap at the moment, but I’ll be sure to let our developers know about the feature request.

Perhaps one of your fellow sellers might have a work around that could help. 
 

[Tekla1]

I created another item and named it Deposit then I just chose no tax for this particular item so I can accept security deposits when my customers order party trays. I hope this helps. 

[The_White_Hart]

Tekla1: Yup, I do this too. But that only solves half the problem. When the customer pays the remainder of the bill, how do you show that credit without affecting the sales tax on the remaining balance? 

[Tekla1]

You can't. I just enter it as either deposit again for the remainder or custom amount. Unfortunately it doesn't let you split nor lets you pick which one to tax and not to tax on same ticket. 

[The_White_Hart]

That's true, Square doesn't let you do that. But how do I collect tax for a $500 purchase when the customer only has a balance due of $300? He's already paid $200 but now I have to collect the balance ($300) plus the tax on $500. 

Right now, I'm forced to figure it all out offline using a calculator, then create an imaginary inventory item with an imaginary price to force the right bottom line total. It's a real kludge, and I have to give the customer an awkward explanation for it all. 

[The_White_Hart]

No need to add it to the roadmap; not what I was asking for. 

[JillTarabar]

Seems this issue has been going on for quite some time as the thread dates back to 2016. I also have challenges as an artist who accepts special order commissions. I've invoiced and received a deposit for $200 from my customer but now that I'm trying to send a final invoice, the $200 is subtracted pre-tax from the total. I set up a line item for that tax on the final invoice and made that line non-taxable which is just confusing to all.

Please address this issue or come up with a manageable work around solution. Thanks!

[Helen]

Thanks for your post @JillTarabar! I just wanted to let you know that this is still top of mind for the team; check out this update about managing partial payments for Invoices from the Product Manager. We'll update this thread as soon as there are any updates! 

[The_White_Hart]

I guess I wasn't clear. Let me try again. 

Let's say a customer buys a $25 item and hands me cash plus a $10 gift certificate they purchased earlier. I'm legally requried to collect the tax on the whole $25, not the $15 balance. How do I enter the $10 credit without also affecting the sales tax? 

Or let's imagine a different scenario where a customer is preparing to buy a $500 item. It's taxble, so his total bill will be $500.00 + 8.625% sales tax = $543.13. 

He pays me a deposit of (let's say) $200 before the actual purchase. I have a "Deposit" button on Square Register for $200, nontaxable, That allows me to collect the $200, allows the customer to get a receipt, and leaves a paper trail of the transaction. 

So far, so good. 

Now the customer wishes to pay the balance. I tap the button for his $500 item, but I also need to show the credit for the $200 he's already paid me. There is currently no way to do this. If I use Register's built-in "Credit" button, it correctly subtracts $200 from the total but it *also* incorrectly deducts the tax on that $200. The result is a $300 sale with tax ($325.88), not a $500 sale with tax, less the deposit ($543.13 - $200 = $343.13). 

In other words, how can I enter a credit/discount for a sale without affecting the tax on that sale? In short, a post-tax credit. Seems like a pretty common scenario... but maybe it's just me?

[flourishmarket]

@The_White_Hart These problems aren't just your problems - I have them too.  I had no idea when I chose Square to process my credit card transactions, sales tax liability and all of the associated processes, that simple bookkeeping tasks like applying a paper gift certificate or taking a deposit towards a purchase would be so difficult.  As a small business, I do not have time to "jerry-rig" a system to handle this.  I hope that the Square programmers will get back to basics and figure this out!

For now when taking a deposit, I will be applying a discount (say 50%) and charging sales tax on that amount.  And then when the customer pays the balance, they will again get a 50% discount and pay the sales tax on the balance.

Not sure what to do for a gift certificate transaction, this process could work, but would be very weird for me explain to the customers involved.  Again, it should not be this difficult!

[NACRES]

I don't know if this will work but I am making a "discount" button to handle my down payments. That way when I am punching up me cabin bill when the peope are leaving I fill in the deposit amount and I think it will give me a good paper trail???? Its the best work around I can come up with. 

[NACRES]

I am quite new at Square and don't know if you have this answered or not and don't know if I should be answering this but here goes.  I have been amazed and never would have signed on with Square if I had realized  this absolutely necessary feature was  missing. There is only 1 way to work around it. Buy yourself the starter pack of gift cards. When I have a customer prepay a portion of their bill I put that value on a gift card (that I keep in the change drawer of my register) and when the person checks out I ring up the total amout, run the gift card through and the customer pays the remainder.         Yes I know it is f+++ing ridiculous but it is the only work around that keeps the right balance.