Tax out of balance

A Purchasing invoice is considered "tax out of balance" if the tax amount specified on the invoice header does not equal the sum of tax amounts on each invoice detail line for goods and AOC. The Tax Out of Balance condition applies only to Purchasing invoices:

• Match invoices
• AOC Only invoices (depending on whether the cost component is set to Yes on Match Process Type)

The setup for this condition happens in Tax. You set up the tax tolerance amount using Tax Code Maintenance. This amount is used to compare tax difference on a PO invoice. If the difference between the tax on the invoice header and the sum of the detail lines is greater than the tax tolerance amount, you cannot release or match the invoice. The Tax Code and Tax Rounding Account fields on Company are used to create a tax distribution for the tax out of balance amount. The tax adjustment can be used to override the tax.

A tax out of balance condition can occur if the tax amount that is calculated in the match process has a rounding error. The amount could be different than the tax specified on the invoice header. By identifying the tax discrepancy before the invoice is matched, the tax amount can be changed manually prior to match and the invoice will not be deleted and created as new.

An error message is displayed when attempting to release or match a PO invoice with tax out of balance on the goods or AOC. If the tax difference is within tolerances, then no message is displayed. The discrepancy is posted to the tax tolerance account that is defined using Company.