How do the tax reports in Light Blue work?

Within Light Blue, you can run tax reports on an accrual (invoicing) or purchases (cash) basis.

Working on an accrual basis means that invoices within the selected date range are included in your tax report, regardless of whether they’ve been paid off or not. It’s very important to note that only Sales which have an invoice number are included; Sales which don’t have an invoice number (marked ‘Not Yet Invoiced’ in the list of records) aren’t included.

Working on a cash basis means that incoming Transactions within the selected date range are included in your tax report, even if the Sales to which they have been allocated fall outside that range. The only way that Light Blue can determine the amounts of tax which are applicable to the Transaction is by looking at the Sales to which they’re linked, so you need to make sure that you always allocate the full amount of the Transaction to Sales. The cash version of of the tax report only includes payments allocated to sale items that have a tax applied to them, so it’s important to set any items that do not have tax due on them to use a zero-rated tax instead of “none”.