Issue
An invoice cannot be synchronised with Xero Ledger, and the following error is added to Practice Activity:
- Error exporting invoices - The TaxType code (code) cannot be used with account code (code).
Clicking on the error, the following is displayed in the Activity Drawer:
- FYI-2178 Update the Tax Type in Xero Ledger for the selected account or select a new account for the Job Template in FYI, before resubmitting the invoice.
Cause
When an invoice is created and contains a Disbursement entry, the Tax Rate on the invoice when synchronised to Xero Ledger depends on the following:
- The Account selected in the Job Template
- The Tax Rate selected for the Disbursement.
- Note: Where a Disbursement does not include GST, the Tax Rate 'GST Free Income' must be selected. The 'GST Free Expense' Tax code cannot be used on an Account code in Xero.
If the Xero Tax Code for the Account in Xero does not match the Tax Rate selected for the Disbursement, the invoice will not be synchronised, and an error will be displayed in Practice Activity.
Solution
To resolve the issue, you will need to do the following:
- Select a different Xero Ledger Account in the Job Template, or update the Tax Rate for the account in Xero Ledger to match the Tax Rate selected for the Disbursement:
- To update the Account selected in the Job Template, refer to Managing Job Templates
- To update the Tax Code for the account in Xero Ledger, refer to the Xero article Components of an account in your chart of accounts
-
Resubmit the invoice from Practice Activity. Refer to Practice Activity
- If the original Disbursement Rate in FYI had an incorrect Tax Rate assigned, you will need to create a new Disbursement Rate in FYI with the correct Tax Rate. Delete the incorrect Disbursement Rate to avoid an incorrect rate being selected in future. Refer to Managing Rates for Time and Disbursements