Correcting invoices with incorrect tax amounts due to improper Geo code

If you are using the Tax Interface, these instructions apply to orders that have been invoice processed and have incorrect tax amounts due to improper Geo code, or where an incorrect exemption certificate was applied. Before you begin, verify the required records are set up in Distribution SX.e.

See Tax adjustment prerequisites.

Use these instructions to create a Correction (CR) order to reverse tax amounts applied to invoiced sales orders and reapply using the correct Geo code.

Note: When you enter a Correction (CR) order to reverse tax amounts applied to an invoiced sales order, the recommended method is to use a labor product set up for tax adjustments only to avoid updating your inventory levels with the transaction. You can indicate the labor product on the CR order is only being used for tax correction reasons and not to adjust a labor charge using the Tax Adjustment option (see steps below).
  1. Select Sales > Entry > Order.
  2. On the Initiate window, select Correction in the Order Type field.
  3. Complete the remaining information on the Initiate window and click Next.
  4. In the Correction window, specify the Return/Adjust Reason for the tax correction.
  5. Specify the invoice number to which this return applies.
    Note: Linking the correction to the original invoice enables the Tax Interface to access the tax rates in effect on the invoice date. If you do not specify an invoice number at the order or line level, the current date is passed to the Tax Interface, and the current tax rate is used.
  6. Clear the Use Step Data check box.
    Note: Leave this option blank unless you are entering a Correction order to reverse taxes that are charged to an exempt customer.
  7. Click OK.
  8. Click Continue.
  9. In the Select Products view, in the Add Line Item section, specify the first line item with these values:
    Product
    Specify the Tax Adjustment labor product.
    Quantity
    Specify –1, or negative one.
    Price
    Specify the total gross amount of the original sales order to be corrected [the amount before taxes].
  10. Select the Tax Adjustment option.
    Note: When selected, this option indicates that the labor product is being used to correct the taxes on a previous invoice. This option is available only if the order is a Correction (CR) type and the product is a labor item. When you create a Correction (CR) order type for a Labor product, the field is enterable. This signals the system to load the Ship From, Ship To, Point of Order Origin (POO), and Point of Order Acceptance (POA) addresses from the original order onto the CR order. This enables the Tax Interface to calculate taxes at the same rate as the original invoiced order.
  11. Click Add.
  12. On the Taxes and Totals view, confirm the order amount is a negative amount equal to the grand total of the sales order being corrected.
  13. Click Save to complete the order.
  14. Next, create a second CR order using the original customer number or ship to.
  15. In the Correction window, specify the Return/Adjust Reason for the tax correction.
  16. Specify the invoice number to which this return applies.
  17. Clear the Use Step Data check box.
  18. Click OK.
  19. Click Continue.
  20. On the Select Products view, click Edit.
  21. Specify the correct shipping address, including the correct Geo Code.
  22. Click Done.
  23. In the Add Line Item section, specify the first line item with these values:
    Product
    Specify the Tax Adjustment labor product.
    Quantity
    Specify –1, or negative one.
    Price
    Specify the total gross amount of the original sales order to be corrected [the amount before taxes].
  24. Select the Tax Adjustment option.
  25. Click Add.
  26. On the Review Taxes and Totals view, confirm the order amount is a positive amount equal to the grand total of the sales orders being corrected with the new tax amount.
  27. Click Save to complete the order and close Sales Order Entry.
  28. Run Sales Entry Invoice Processing Report to invoice process the CR orders. This posts the debit and credit to the customer’s account and generates an invoice that is submitted to the customer.
    Note: To invoice-process the order before your normal overnight batch process, contact your system administrator to request a one-time processing of these CR orders. The system administrator can also suspend printing of the invoice if you do not want the customer to receive an invoice.
  29. After the CR orders have been invoice processed, select Customer > Entry > Cash Receipts.
  30. Click OK to open a journal for the current date and posting period.
  31. Select Apply Credits.
  32. Click Continue.
  33. Select Customer.
  34. Specify the customer number.
  35. Click Next.
  36. In the grid, select the Miscellaneous Credit (MC) created by the first CR order.
  37. Apply this credit to the original invoice that was charged taxes on the incorrect Geo code.
  38. Select the debit created by the second CR order and apply it in the same manner.
  39. When you are finished and the proof is zero, click Save.
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