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sales tax remittance

  • 1.  sales tax remittance

    Posted Jan 18, 2021 09:31 AM
    #Admin#Functional#BC/NAVPlus
    New to BC and user's group, trying to figure this out.  How do I create a PO invoice to pay sales tax without using our GL sales tax account.  I want to turn off direct post on the GL account, but need to have a way to pay sales tax without using the account.

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    Jon Laskowski
    Permaloc
    Holland MI
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  • 2.  RE: sales tax remittance

    NAVUG ALL STAR
    Posted Jan 18, 2021 11:05 AM
    Jon,

    Sorry but not following. Let me outline what I think you are asking for and then please reply back...

    You collect Sales Tax from Customers over time. I now have to pay the Monthly/Quarterly Sales Tax and need to create a Purchase Invoice. All the collections are booked to a G/L Account called - Sales Tax Payable. My Purchase Invoice is paid to Vendor - State of XXX and on the Purchase Line I will select Account Type = G/L Account, No. = Sales Tax Payable. I will enter the amount owed/collected (based on the Tax Return filing). I will post the Purchase Invoice creating a Debit - Sales Tax Payable and Credit - AP. I will then process a Payment Journal to pay the Invoice.

    Note that the actual collection of Sales Tax from the Customers created credit entries to Sales Tax Payable.

    The above is what I would expect and how the overall process flows. Email back if this is what you are looking for or please explain.
    Thanks,
    Steve

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    Steven Chinsky
    Manager
    Wipfli
    Mansfield MA
    NAVUG/BC Programming Committee Member
    NAVUG All-Star, Granite Award Recipient, MCP, DCMP
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  • 3.  RE: sales tax remittance

    Posted Jan 18, 2021 11:34 AM
    The process you laid out is exactly what we have been doing.  Here is the problem we had - in the course of business, we had a sales rep try and 'fix' an issue by entering sales tax payable as a GL line item on a sales order...this caused our sales tax payable account to differ from our sales tax collections report.  I want a control measure that prevents that from happening.  Turning off 'direct post' in the chart of accounts will do that, but that prevents me from using sales tax payable as a line item in my purchase invoice.  Maybe BC doesn't have this functionality...our previous software had a 'pay sales tax' button.

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    Jon Laskowski
    Permaloc
    Holland MI
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  • 4.  RE: sales tax remittance

    NAVUG ALL STAR
    Posted Jan 18, 2021 11:52 AM
    Jon,

    I follow. Yes, the Direct Posting boolean will prevent such an event from happening but then you have the issue of not being able to pay it. You are not the first person to have ever had this issue. For something like this I try to reinforce training. I am thinking your Sales Rep enter Sales Order so we cannot change their permission to READ only. If this is a serious problem, you might consider a request to your Partner to create a POP-UP message when a User tries to enter a G/L Account Type = Sales Tax Account, on a Sales Line. The message can state 'You are not allowed to correct Sales Tax, contact Accounting.'

    Hope this helps.
    Steve

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    Steven Chinsky
    Manager
    Wipfli
    Mansfield MA
    NAVUG/BC Programming Committee Member
    NAVUG All-Star, Granite Award Recipient, MCP, DCMP
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  • 5.  RE: sales tax remittance

    NAVUG ALL STAR
    Posted Jan 19, 2021 09:04 AM
    I like Steve's suggestion of a message. A couple of other potential options you might consider (that will require management and / or testing):

    1. Turn off Direct Posting to the G/L account until you are ready to pay the sales and use tax. Control who is able to turn the Direct Posting on or off.
    2. Allow Direct Posting and turn on the Change Log for that field. Review the change log entries monthly (?) to try to catch changes (who and when). Reconcile sub-ledger to ledger monthly using the sales tax report against the G/L so corrections can be made right away.
    3. Use a workflow (unsure what version you are in), that requires approval document when that G/L account is used so that you can correct it appropriately.

    Just a few thoughts.

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    Amanda Mayer
    NAVUG All Star
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  • 6.  RE: sales tax remittance

    TOP CONTRIBUTOR
    Posted Jan 20, 2021 10:50 AM
    A Variant on the Amanda solution. If you have multiple invoice processors , which can create more security issues:

    1, Create a contra account to charge the payment of the sales tax. Invoice processors will not need to change direct posting flag.
    2. When the sales tax account reconciles the accounts and verifies them, the can throw the Direct Posting flag and zero out the contra/payment account and post it.
    3. The sales tax accountant can turn the flag back on.

    This may enable the ability to and responsibility for to fewer people.

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    Michael Carr
    VP , Finance
    Philadelphia Scientific LLC
    MONTGOMERYVLE PA
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