Tax setup options

Before you begin setting up the Lawson Tax application, you must decide:

How you want to view taxes (with summary or detailed viewing)
Which general ledger accounts you want to use for posting
How you want your tax codes to affect taxable transactions (as an invoiced or accrued tax)

The next three sections explain each of these tax setup options in greater detail.

Difference between Summary and Detailed Viewing

During the setup of your tax system, you must designate whether you want to view tax at the company or tax code level. The level you select affects the information you see. This table describes the differences in viewing taxes at the company and tax code levels.


Level	Information presented
Company	Summary of taxes without detail information (such as which general ledger accounts are posted to and how each tax code is used).
Tax code	Detailed information such as landed costs, invoiced and accrued taxes, and dates when the system calculates tax (invoice, shipping, or payment date).

General Ledger Input and Output Accounts

During setup, you must designate which general ledger accounts the system posts to for input and output taxes. Deciding now which general ledger accounts to post to will make the setup process easier.

This table describes the general ledger accounts you can post to.


General ledger account	Description
Input Account	The general ledger accounting unit used for input taxes. Input taxes are paid by the company through the Accounts Payable application.
Input Due Account	A temporary account that your sales tax is posted to when your tax point date (the date the system recognizes tax) is set to the payment date. With this account, the sales tax is moved to the input account when you pay the vendor. The tax point date is the date you want the system to recognize tax. The tax point date can be the invoice, shipping, general ledger post date, or payment date.
Output Account	An account in which you collect taxes through the systems that bill customers.
Output Due Account	A temporary account that your sales tax is posted to when your tax point date is set to the payment date. With this account, the sales tax is moved to the output account when the customer pays the invoice. Note: The tax point date is the date you want the system to recognize tax. The tax point date can be the invoice, shipping, GL post date, or payment date.

Invoiced versus Accrued Tax

There are two types of taxes in the Tax application: invoiced tax and accrued tax.

An invoiced tax represents an increase to the transaction amount. An accrued tax has no effect on the transaction amount (it is non invoiced).

At the tax company or tax code level, you decide how tax codes will affect your taxable transactions (whether they are invoiced or accrued).

Consider this decision carefully. You should not change back and forth from invoiced to accrued because making sudden tax changes affects postings to the general ledger.

This table lists several examples of invoiced and accrued taxes.


Tax name	Kind of tax	Description
Value-added tax	Invoiced tax	Tax that is imposed on the value added to a product or transaction; the final user (consumer) pays the tax.
Goods and Services Tax	Invoiced tax	Tax on goods and services you bought from Canada (federal level); lets you calculate a tax on a tax.
Provincial Sales Tax	Invoiced tax	Tax on goods and services you bought from Canada (provincial level).
Use Tax	Accrued tax	Tax that is imposed on the use, storage, or consumption of property after a sale takes place.