Microsoft Dynamics AX (Archived)

Posting VAT as input VAT and into the vendor account

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Posted on by oldman.logan

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Hi.

We are trying to post a general journal entry. The transaction is as follows.

We gave an order for something last year for total of SAR 12,600. SAR 600 is 5% VAT for the SAR 12000.

We paid an advance of SAR 7000 for this item, not recording any VAT on this payment.

The remaining SAR 5,600 we paid last week (inclusive of the 600 SAR total VAT for SAR 12,000).

Now the problem is how do we post this? We want to show this total SAR 12,600 (SAR 7,000+SAR 5600) in the vendor account as settled from the bank.

We also want to show the VAT paid as input VAT. How do we post this? Any advice? Thanks in advance.

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oldman.logan 557 on at

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RE: Posting VAT as input VAT and into the vendor account

Hi. Yes the voucher is fine and the associated ledger balances are correct. I have to get that report checked. The accounts use the journal printout report for filing purposes. But even if the report is wrong, the sales tax totals show up with only the 266.67 SAR. I wonder why that is. This should do for now though. Thank you so much for the support Dr. Ludwig. We deeply appreciate it.
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Ludwig Reinhard Microsoft Employee on at

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RE: Posting VAT as input VAT and into the vendor account

Hi,

As long as the voucher is ok, things should be fine for the accountants.

The report might simply calcualte 5% on top of the amount and ignore the adjustments made. This is something you have to double check with a developer because I currently do not have a AX2009 dev envionment available. If my assumption is correct and you need that report for some kind of reporting, you would have to modify it. Otherwise, I would not try modifying it because the modifications costs you time and money.

Best regards,

Ludwig
oldman.logan 557 on at

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RE: Posting VAT as input VAT and into the vendor account

Hi. I just tried this. Following are the results.

The voucher looks fine.

SAR 600 has been posted to the input vat account.

However in the journal print out, I see the original sales tax amount of SAR 266.67 shown. (5% of 5600). It also shows up in the sales tax total.

Is this normal? I double checked the voucher, this 266.67 is not reflected anywhere. What to do to prevent it from showing in the totals and journal printout?
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Ludwig Reinhard Microsoft Employee on at

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RE: Posting VAT as input VAT and into the vendor account

Hi,

Previously you mentioned that the whole tax needs to be posted with the second invoice/transaction. This requires that you add 600 in the adjusted sales tax charge field and then select the apply button.

Once you have done that and close the form.

In the journal you should see the adjusted sales tax amount in the lower section.

The only thing left is then posting the journal and double checking the voucher.

Best regards,

Ludwig
oldman.logan 557 on at

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RE: Posting VAT as input VAT and into the vendor account

Hi. Thanks for your reply. We have not done this before. How does this work? The system auto calculates SAR 266.67 as VAT for the SAR 5600. Should I put the remaining of SAR 600-266.67=333.33 as adjusted amount? Or is it possible to remove the system VAT calculation and adjust the total of SAR 600?
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Ludwig Reinhard Microsoft Employee on at

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RE: Posting VAT as input VAT and into the vendor account

Hi,

I see. You can then post the second transaction as usual and overwrite / adjust the calculated sales tax with the complete sales tax amount.

This can be done in the temp. sales tax form that is available in the journal.

Please test in a demo environment first if you have not done this before.

Best regards,

Ludwig
oldman.logan 557 on at

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RE: Posting VAT as input VAT and into the vendor account

Hello and thanks for your reply Dr. Ludwig.

Yes, we posted the first transaction as you mentioned. However no VAT was posted in the first journal voucher.

So we need to post the VAT for the entire transaction in the second one.
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Ludwig Reinhard Microsoft Employee on at

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RE: Posting VAT as input VAT and into the vendor account

Good Morning,

As I understand, you posted the first transaction as follows:

DR: Other selling & distribution exp

CR: Bank

Question: Was sales tax posted with this kind of expense invoice? Can you check this from the voucher?

The second transaction can actually posted on the same accounts as long as you post sales tax.

The amount of sales tax you post with the second transaction depends on the amount of tax posted with the first transaction.

Would be great if you could answer the question above.

Thanks,

Ludwig
oldman.logan 557 on at

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RE: Posting VAT as input VAT and into the vendor account

Dear Dr. Ludwig,

No this is not related to vendor prepayment. I made a small mistake in the question.

We purchased something locally without a purchase order and recorded it through a journal entry as advance payment.

We recorded the advance payment of SAR 7000 as a journal entry between bank and a ledger account called "OTHER SELLING & DISTRIBUTION EXP".

So now the remaining payment of SAR 5,600 has to be posted to the same ledger account using a similar journal entry as we did with the advance payment.

However, we also want the SAR 600 to be reflected in Input VAT.

I hope I am clearer now. Please advice.
Ludwig Reinhard Microsoft Employee on at

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RE: Posting VAT as input VAT and into the vendor account

Hi,

As I understand your question, you seem to use a process similar to the one describe in this post

dynamicsax-fico.com/.../vendor-prepayments-3

Can you go through the description provided and let us know if this is the process you want to incorporate?

Many thanks,

Ludwig