Our purchasing folks currently add sales tax to purchase orders as a separate line item and receive it with the goods. The reason they do it this way is that we charge sales tax to the same expense account as the underlying goods. We use 0% tolerance for receiving and if we were to increase the unit price by the sales tax rate it would cause rounding issues as well as confusion when checking matching the vendor invoice.
We would like to use the GP Sales Tax functionality to calculate sales tax on purchase orders and receivings automatically and avoid all the additional data entry. The credit distribution from the tax detail window can be set to the Accounts Payable gl code. The problem is that the debit side of the transaction would default from the Sales Tax transaction type in Posting Accounts setup, vendor class setup or vendor accounts setup. So we can only have one default expense code per document based on the vendor accounts setup and not based on the purchased item. By the way, we do not use the inventory module.
Is there a set up trick or a third party product that will automatically set the sales tax distribution debit to match the expense distributions for the underlying purchase? If there is more than one expense code charged on an order, the tax distribution must be split proportionally. How does your company expense sales tax on non-inventory purchases in GP? Thanks!
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