Accounting Rules and Rulesets

Accounting Rules and Rulesets

Taxnexus uses a process similar to rule-based project accounting to finely divide the accounting transactions that are generated from transactional business objects.

Taxnexus requires that each line item in an invoice, quote, PO or order be encoded with a Taxnexus code. Each Taxnexus code is associated with two sets of accounting rules.

For example, the Taxnexus code merch-cannabis is associated with a set of revenue accounting rules called rev-cannabis-retail and a set of purchasing accounting rules called purch-cannabis-retail. These sets of rules govern how journal items are posted to the GL.

These are the rule names for rev-cannabis-retail:

  • revenue-merch-cannabis
  • state-cannabis-excise-tax
  • federal-cannabis-sales-tax
  • state-cannabis-sales-tax
  • county-cannabis-business-tax
  • district-cannabis-business-tax
  • county-cannabis-sales-tax
  • district-cannabis-sales-tax

Rule #1 contains the debit and credit accounts used to post cannabis merchandise transactions. In this case, those accounts are 12000 Accounts Receivable and 41131 Cannabis Retail.

The remainder of the rules are used in combination with Taxnexus Situs database to record any of taxes that may be applicable to this transaction. Rule #3 would only apply in Canadian jurisdictions, for example.