We had to accrue use tax on an advance payment to a supplier (new supplier, required payment in full in advance on a purchase). The use tax was properly added on the Manual Supplier Invoice Tax Lines. However, when the invoice posted, the entry to the GL for the use tax came in at zero. The posting controls called with this function are IP22 and IP24, and when the invoice was paid it called PP39 and PP41. These posting controls hadn’t been used in the past (almost 4 years on IFS), despite frequent advance payments and frequent invoices with use tax. We figured out that the posting controls were specific to Supplier Advance invoices with Tax, and apparently this was the first time we’d had this combination of events at the same time. Other than than that we can’t figure out why this didn’t work as expected. Anyone else run into this? TIA!!
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Is the tax set ‘invoice’ or ‘payment’?
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Hi Christy! All of ours are set to Invoice Entry for both Tax Received and Tax Disbursed.
Thanks!
Martha
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This is what we get by posting an advanced invoice
Is it possible they have been booking these as a payment on account rather than an actual advanced invoice?
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and the full analysis from invoice through payment
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Hi Christy! So sorry for the delay, I was waiting to get clarification from our internal ERP support team but no luck so far so this is what I can share - one screen shot attached shows the posting controls being used by the Advanced Payment that we are processing with use tax. We are marking the invoice as an “advance payment”, and we never set up the installment payment functionality in IFS since we don’t make installment payments, so I’m pretty comfortable we’re calling the right posting controls for an Advance Payment. It seems to me that the Advanced Payment functionality is working correctly. The problem is that we had use tax on this invoice - screen shot of the tax lines on the MSI is also attached. Normally when we have an invoice with Use Tax, it works fine with this functionality. However, we’ve never had Use Tax combined with an Advanced Payment, so that seems to be throwing us off. Thanks again for looking at this for me, I appreciate any insight you might have to share!
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Have you fetched the tax ledger and reviewed tax transactions? You can also review the balance per tax account (RMB/details to review the details behind these balances).
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Hi Christy,
I have done an in-depth analysis of the GL, there was zero impact to the tax accrual from this entry. How would the fetch functionality change that? I’m just trying to understand, since again, this works perfectly well exactly the way we currently do it in all circumstances except this one.
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I am not an IFS tax expert but I have always had to fetch the tax ledger to complete use and withholding reports. Per IFS help (you have likely seen this but sharing in case you have not)
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Hello,
We are talking here about supplier invoice. And both tax codes used on the example invoice are non-deductible.
In case of supplier invoice, only deductible part of tax is booked as tax entry (IP4 or IP22) and goes to tax ledger. Non-deductible part of tax is treated as additional expense and in case of regular invoice increases invoice net amount to be posted (counterpart to IP5 posting type).
In case of advance invoice, IP18 is posting gross amount of the invoice already and there is no need to include non-deductible tax separately. That’s why this amount is ignored in accounting schema.
And please note that IP24 is not a tax entry, and ideally it should go to different account…
I hope my explanation is clear enough.
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