Entering an Invoice that has Tax

If you receive taxable invoices from your vendors, you may want to process and track those invoices differently than a basic invoice. The Basic Invoice (AP20.1) and Taxed Invoice (AP20.2) are identical, except that you can enter tax amounts and tax distribution lines on a taxed invoice.

The Tax Adjustment field lets you override the tax information on add-on charge/allowances invoices or match invoices. Seven ways to override are provided.

• Override tax for product only

  The two reasons to use this option are to

  • Override the tax code that is on the purchase order

  • Override the tax code if there is tax on the invoice, but you do not know if there was a tax on the purchase order

  By selecting this option, you override the tax code on the purchase order with the tax code that is on the invoice for products only (does not include AOC). If you select a tax code on Taxed Invoice (AP20.2) and you leave the Tax Adjustment field blank, this option automatically defaults if a tax code exists on the purchase order line. If the tax code is on the header and none of the lines were marked as taxable, you receive an error message telling you to fill in the Tax Adjustment field.

  Choosing this option lands the cost if you have Landed Cost set to Yes on Tax Code Maintenance (TX02.1). If this tax code is an accrued tax, the offset goes to the accrual code you set up in TX02.1. If this tax code is an invoice tax, the offset does not go to the accrual code (the application does not use the accrual tax code unless it is an accrued tax).

  Selecting this option means that the application applies the override tax to the purchase order lines, so it lands the tax to the lines.

• Ignore tax for product only

  Select this option if there is a tax code on the purchase order and you do not want to use a tax code in relation to the product. This allows you to ignore that tax code on the purchase order and not put a tax code on the invoice. If you select a tax code and try to use this option, you receive an error message.

  This option applies only to the product; if add-on charge lines have tax, the application still calculates the tax based on that criteria.

• Calculate

  Select this option to calculate the tax based on the tax code on the invoice header. The Calculate option creates a tax record; it does not look at the purchase order nor does it apply taxes to the lines.

  If this is an accrued tax, the offset goes to the accrual tax code set up in Tax Code Maintenance (TX02.1). If an invoice tax is used, the tax amount is distributed to the input account you set up in Tax Code Maintenance (TX02.1).

  The taxable amount is required for this option. Also, this option is a non-landed, header-only tax.

• Override tax for product and add-on charge

  This option is similar to Overriding Tax for Product Only, but it also overrides the tax code on the add-on charge. If the add-on charge entered on a purchase order has a tax code assigned to it, the application overrides the tax code on both the purchase order line and the add-on charge.

• Ignore tax for product and add-on charge

  This option is similar to Ignore Tax for Product Only, but it also ignores tax on an add-on charge. If you enter an invoice and do not want tax applied to it but there is a tax code on the header or line item, do not enter a tax code on Taxed Invoice (AP20.2). Use this option to prevent the tax from being calculated.

  If you select this option and the add-on charge is added to the invoice, the tax is not applied to the add-on charge that was added to the invoice.

• Override Taxable PO Line and PO line with AOC

  This option is used with a rate to calculate the tax rate on the invoice and override the rate on the PO. This option is used when the tax entity bases tax collection on a different criteria than the Po. At the time the invoice is received the tax rate is different than that entered on the PO.

The following procedure tells the process for entering tax on an invoice. If you need information on entering invoices generally, see

• Entering an Invoice for an Invoice-Level Match

• Entering an invoice for a detail-level match

To enter an invoice that has tax