Best Practices for creating Invoices & Credit Notes in Stripe

To ensure Galvix calculates sales tax accurately, it's important to follow certain invoicing & credit notes creation practices in Stripe. This guide highlights the essential steps for creating an invoice or credit note, as well as key considerations to avoid.

Here's what is covered in this Guide -

• Provide Complete & Accurate Customer Addresses
• Select Correct Invoice Date
• Verify Setup Completion
• Creating an Invoice
• Editing an Invoice
• Creating a Credit Note
• Next Steps

Provide Complete & Accurate Customer Addresses

Galvix relies on accurate shipping addresses from the transaction to determine the correct tax jurisdiction, as tax rates vary by zip code, city, and state. If a shipping address is not available, the billing address will be used for tax calculations.

When creating an invoice in Stripe, the address fields are pre-populated based on the values saved in the customer record. However, if you manually update these fields to a different address. Galvix will always use the address specified on the invoice or credit note, not the customer record, for tax calculations.

For precise tax calculations, it is recommended to include the following address details in your invoice or credit note :

• Full street address
• City, state, and country
• 9-digit zip code (e.g., 12345-6789) for enhanced accuracy

Select Correct Invoice Date

Galvix uses the invoice date to determine which tax return period a transaction belongs to. To avoid exclusion from return calculations:

• Choose an invoice date in the current or future month. Past-dated invoices (e.g., from a previous month) may get excluded if a return has already been filed by Galvix for that period.

Verify Setup Completion

Before creating invoices, confirm that your Stripe account is properly configured for Galvix:

• Integration: Ensure Stripe is successfully connected to Galvix (see our Stripe Integration Guide).
• Configuration: Complete all Stripe configuration steps, including customer taxability settings (see our Stripe Configuration Guide).

Creating an Invoice

Follow this recommended workflow to create invoices in Stripe, ensuring accurate tax calculations by Galvix.

Steps to Create an Invoice:

• In your Stripe account, navigate to Invoices
• Click on the +Create Invoice button to create a new invoice
• Choose a Customer to add to the invoice
• Add Items to the invoice
• Add Shipping as line item if applicable

• Click on Save
• Once saved, allow a few seconds for Galvix to calculate tax and update the draft transaction in Stripe
• Once taxes appear correctly, you may print or send the invoice.
• Once finalized (invoice status in Stripe is updated), the transaction will sync into Galvix and appear under the Transactions tab.

Editing an Invoice

To ensure Galvix accurately updates sales tax calculations when editing an invoice in Stripe, follow the recommended workflow below. This guide ensures seamless tax updates and compliance.

Steps to Edit an Invoice:

• In your Stripe account, navigate to Invoices
• Select the Invoice you want to edit and open it
• Click on the Edit Draft button to edit an invoice
• Make necessary changes (e.g., update customer, items, etc).
• Click on Save
• Once saved, allow a few seconds for Galvix to calculate tax and update the transaction in Stripe
• Click Update Invoice

Stripe will create a new invoice and void the old invoice. Galvix will remove the void transaction and sync the new transaction for accurate tax information.

If the invoice was part of a filed return, Galvix will:

1. Keep original transaction as is
2. Create a refund transaction to reverse the original invoice and tax
3. Create a new sale transaction with the new invoice details

This ensures your return filings remain accurate and audit-ready.

Creating a Credit Note

Follow this recommended workflow to create credit notes in Stripe, ensuring accurate tax calculations by Galvix.

Steps to Create a Credit Note:

• In your Stripe account, navigate to Invoices
• Select the Invoice against which you want to issue a Credit note
• Click on the 3 dots on the top right
• Click Issue a credit note
• Select reason for creating a credit note
• Choose the items against which you are issuing a credit note
• Click Issue credit note

Next Steps

Now that your Galvix & Stripe integration is complete, you may explore our Stripe FAQ guide.