This PO has items that are non-inventory, and is set to taxable in the header. The tax rate is 10.25%
When creating the pquote, I entered in the cost of each item, and it correctly calculates and adds it to the tax estimate on the bottom of the pquote. E.g. line 1 had a cost of $17.09 (prior to any sales tax).
If you click one of the receipts, it shows Cost: $17.09, Cost Breakdown - Cost: $15.34, Cost Breakdown - Tax: $1.75.
The “Cost Breakdown - Cost” is incorrect. This calculation removes the sales tax from the $17.09 value… it doesn’t seem to be used anywhere, so maybe it doesn’t matter.
If you click on the ledger for this item, it puts the cost ($17.09) into GL account (in this case, lab expenses) and unvouchered receipts account.
What it should also be doing when the item is received is putting the tax component ($1.75) into sales tax payable and offsetting the same GL account (i.e. lab expenses), but this doesn’t happen.
once you go to voucher this, add receipts from the PO to the ledger, and click on the button to add sales tax, you end up with a split that automatically sends a credit to the “Sales Tax Payable account” and debit to “Accounts Payable”. See ledger. Accounts payable is later cleared out once the payment is complete and the cash leaves our bank account.
However, the amount that is in the Sales tax payable account remains after the PO is paid and closed out… leaving us to clear that out with a manual ledger entry? that’s not very convenient… a simple fix would be to add an entry to sales tax payable as I have described above.
Sales tax is not calculating correctly on the receipt, though the receipt is correctly breaking down the Part cost from the Part record and the Sales Tax (though incorrect amount calculation). We will be looking into that on our end.
If Sales Tax is already included in part cost, it should not recur as an additional line on Voucher. It only needs to be included once.
There should be no accrual to Sales Tax Payable in this case. Your vendor is receiving the sales tax portion from your payment so you shouldn’t be hitting Sales Tax Payable at all in this case.
If there is no Sales Tax already in the Receipt cost breakdown, then if adding a split to the Voucher for Sales Tax, the DR on that split line should be to the Non-Inventory Lab Supplies and Expense GL account as part of the total cost of the Non-Inventory part.
Please let me know if you have more questions. I will also get back to you about the incorrect cost breakdown.
#2: I guess we could add it in to each line item, but that would be more work.
#3: I looked at this again – the reason it hit that is because there’s a GL transaction mapping setting for “PO Tax Account”, which we routed to our Sales Tax Payable account… that doesn’t make sense to have it route to any one account. Normally for a PO, I would think it should be routed to the same account as the line (if it is taxable).
I guess the scenario is what to do if we send a PO via pdf to a vendor for non-inventory items. We can’t include the sales tax in the part cost, otherwise that throws the vendor off. The normal way is to set the sales tax globally in the header or on a line item basis. What I was hoping/expecting to happen was that if we did that, and set a GL expense account for each item (whether it is non-inventory lab supplies, office supplies, etc), then when we receive a voucher, the sales tax portion should go to that GL account. It’s more manual math to apportion the sales tax by hand once we receive the voucher if we mix items that have different GL expense accounts e.g. office supplies, lab supplies, computer supplies, etc. on the same PO… Would be nice if the ERP did this for us
Vikas, #2 should not be necessary. #3 PO Tax account setting may be what is causing (part of) the problem. And CETEC ERP should be handling this for you if set up properly. We are looking into the issue with other production support team members to get this resolved as soon as possible.
Wanted to update you that a ticket has been submitted to determine why the Non-Inventory part cost is not calculating correctly on receipt and whether this could possibly be related to the PO Tax Account config setting having been set to Sales Tax Payable.
As to your comment #2, we do see how if you have a PO for Non-Inventory receipts of multiple types of supplies and are all Vouchered to the same Vendor, then you will have the issue of needing to add split for Sales Tax posting to the same supplies expense account that the supplies expense the receipt is posting to. So in that case yes you would need to change the default for Sales Tax mapping on that split line to the related expense account. We don’t support multiple SalesTax GL account mappings because most of our customers/users combine supplies expense accounts to one Supplies GL Account in order to limit the need to allocate sales tax to multiple expense accounts on a single voucher/invoice (and at the time of tax prep these tend to get combined to a single Supplies total amount on the return anyways)."
We will send you an update as soon as possible about the sales tax calculations on the receipt.
We have been able to determine that the screen view for the Non-Inventory receipt you are seeing is an appearance issue only, breaking out a Sales Tax amount and Cost amount for a total that doesn’t seem correct. In fact, this is a “Landed Cost” appearance in the screen you are seeing. We do have future development planned to change this appearance on the Non-Inventory receipt screen to eliminate confusion. If while in the view receipt screen the user clicks on the “ledger” link in the upper left menu of the receipt screen, you will see that the ledger posts the correct amount, with no Sales Tax added. So when the user Voucher’s the Non-Inventory receipts, the user adds the Vendor requested Sales Tax Amount (which should correspond with the PO Sales Tax rate) by adding the Sales Tax split on the Voucher for a total cost of the Non-Inventory receipt on the Voucher. And of course, as described in the previous reply, if you are Vouchering multiple Non-Inventory receipts on a single Voucher to the Vendor, you may have multiple splits to add for Sales Tax if you need to allocate the Sales Tax to multiple expense accounts.
To your point that you would prefer for CETEC to do that for you, if your production environment has the config for “Landed Cost” enabled, CETEC system would do that for you. However, this would enable “Landed Cost” on all receipts, both Inventory and Non-Inventory as we do not currently support separate config enable for each type of receipt. For now, as discussed in previous reply, perhaps consider consolidating your Supplies type expense accounts so Vouchering multiple receipts for Supplies would be less tedious in terms of adding splits for Sales Tax on those Vouchered receipts.
Let us know if we can be of further assistance with this issue.
Thanks for getting back to me on this. I’ll consider your suggestion and/or split up into two different POs for separately expensed items.
The only other suggestion I would have is to round up/down the calculated sales tax split to the nearest penny. It comes back with 5 significant digits on the split, so it always needs to be modified.
