Specifying taxed invoices

If you receive taxable invoices from your vendors, you will want to process and track those invoices differently than a basic invoice. The Basic Invoice and Taxed Invoice forms are identical, with one exception: you can specify tax amounts and tax distribution lines on a taxed invoice.

Before adding a taxed invoice, you must complete required tax setup. Completing tax setup You should also review and understand how to specify an expense invoice. Specifying an expense invoice All concepts and optional procedures related to basic invoice entry are also applicable to taxed invoice entry.

Specify a taxed invoice

  1. Access Taxed Invoice (AP20.2).
  2. Specify or select required and optional invoice data as described elsewhere in this user guide. Specifying an expense invoice
  3. Specify this information:
    Invoice Amount

    Specify the amount of the invoice. Some taxes (invoiced tax) are included in the invoice amount, while others (accrued tax) are not included.

    Taxable

    Specify the total taxable amount of the invoice. If the taxable amount and tax code fields are not blank, and the Tax Ind on the distribution is not set to T, the system will calculate the tax amount based on the specified taxable amount and the rate defined for the tax code.

    Tax Amount

    You can specify the total tax amount of the invoice. Leave this field blank if you specify a tax code. The application uses the tax code to automatically calculate the tax amount based on the rate defined for the tax code. The amount should equal the total tax distribution amount.

    Tax Code

    Specify or select a valid tax code to be applied to the invoice. The application automatically calculates the tax amount and creates distribution lines. If you assigned a tax code to the vendor, you can leave this field blank and that code will default.

    Tax Adjustment

    You can specify whether to override the tax information on AOC or match invoices. If you leave this field blank, when the invoice is matched the detail is created using the tax information from the purchase order or the receipt.

    Tax Ind

    To create linked tax distributions, define the distribution line as taxable (T). To specify the distribution is tax exempt, define the line as Exempt (E).

    Note:  The Accounts Payable Tax Exempt Transactions Report (AP272) will list exempt transactions. You must define tax period end dates before running AP272.

    Leave this field blank to specify that no linkage is required.

    Tax Code (Distribution)

    If the distribution line is taxable and you assigned a tax code to the invoice or vendor, that code default here after you add the invoice. You can also assign tax codes on the distribution lines to apply different taxes to different lines. The tax account from the tax code definition is automatically assigned.

    Consider these tax code types:

    • Landed/Non-recoverable tax code — If you set Tax Ind to T and you select a "landed" tax code, Accounts Payable creates a landed tax or a non-recoverable tax distribution, which means that the tax is posted into the same account as the expense distribution.

    • Accrued tax code — If you need to self-assess the tax and post the tax amount into both the tax input and the tax output accounts, use an accrued tax code.

    Taxable Amount (Distribution)

    If you assigned a tax code to the invoice or vendor, distribution lines are automatically created. You can also specify a taxable amount in this field on the distribution line.

    You can specify a prorate tax code and taxable amount using the Prorate tab.

Related reports and inquiries

To Run
List tax exempt transactions for a vendor or a range of vendors. Accounts Payable Tax Exempt Transactions Report (AP272)
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