Our company often places purchase orders for non-stock items that are taxable, such as office supplies. For example, a buyer will place a PO for $100, and will put sales tax of $8.30 on the PO Line Release.
When we then enter the AP Invoice for the PO lines, again, the sales tax amount is now following the line so, we manually add a New Line Tax Code on the invoice lines, and it creates a ADJ-PUR which puts the sales tax amount to the same GL account as the PO Release.
This appears to be working, but here is the issue: Our AP accountant has to add a New Line Tax Code for every taxable line that we invoice. It seems very burdensome and redundant to manually add a line tax on the AP Invoice when this was already completed on the PO Release.
Shouldn’t the tax amount follow the PO Line all the way through the receipt and invoice entry? Is there a better way to handle this?
I’d check your GLControls on the tax to determine the expected GLAccount the tax is hitting. I would expect tax would not be included in GRNI but I am not a financial fellow.
I am not familiar with the Tax Code functionality you are referencing, but an alternative might be to use a Misc Charge on the header, as those do pull to AP. And the Misc Charge can be pointed to a specific GL account. I don’t recomment Misc Charge on lines, only on the header, as there are complications that arise there. The GRNI report will only show the Item Receipt Lines, but the AP clerk can voucher the misc charge with the click of a button during invoice entry.
This is the solution we are currently using and its very simple. The only issue is that the sales tax amount is hitting the GL Control on the Header Charge. Instead, we would like it to follow the GL account on the PO Release…
Depending on the number of GL accounts you’re trying to hit, you could create multiple GL controls, e.g. one for office supplies, one for small tools & equipment, etc., but this would certainly be cumbersome if you’re trying to split across 27 different accounts.
