On a posted sales invoice journal, what tax should be chosen to display on sales invoice report, from financial point of view. Should this be calculated value of actual value?
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Hi Sohaib,
Technically speaking it varies from organization to organization to finalize which field of tax should be displayed on Sales invoice report as Sales invoice report could be used for external reporting purposes required by external institutions or Government. However, from financial perspective "Actual Sales Tax" should be displayed on invoice report. Since, calculated sales tax is the proposal by system based on the Sales Tax Code setups but users can change calculated sales tax amount and whatever the amount gets changed it reflects in Actual Sales Tax amount. If nothing is changed by the users, Actual Sales Tax amount is equal to Calculated Sales Tax amount. Entry is also getting posted with "Actual Sales Tax amount".
Regards
Muhammad Matloob
Hi Sohaib
Actual VAT is the figure actually charged to the customer as part of the invoice total.
AX calculates a figure based on the VAT group/Item VAT group combination and this initially populates both the calculated and actual VAT group fields. The user can then manually override the VAT to record whatever VAT value they want to. This new value would be stored in the actual VAT field.
From a UK perspective it is more commonly used on the purchase ledger side where the actual VAT on the invoices received differs from the amount calculated by AX. This difference might be down to rounding or down to incorrect calculation in either the vendor's accounting system or AX (hopefully not the latter if it is set up correctly). In this circumstance we have to record the actual VAT on the invoice so a VAT override would be done when recording the invoice.
There is then a report in general ledger reconciliation that can be run to show VAT transactions where the actual VAT deviates from the calculated VAT. This can be run as an additional check that any VAT overrides look reasonable.
From a sales perspective, if AX is set up correctly then the calculated VAT should be correct in the first place and will be the same value as the actual VAT. We should still use the actual VAT field on invoice documentation in case it did get changed for any reason.
Cheers Andrew Wallis and Muhammad Matloob.
This is helpful.
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