Purchase Taxes User Guide

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Purchase Taxes Overview

The Purchase Taxes (PT) module allows companies to calculate, capture, and report government taxes imposed on companies. Because the laws that govern taxes differ, the PT module employs user-defined tax codes and tax rate tables to allow users to set up the system to meet specific requirements.

The Purchase Taxes module works together with the Accounts Payable (AP) module. After establishing tax codes and rates within the PT module, the AP module uses that information in the process of entering and paying invoices. Then, after processing invoices using AP, use the PT module to produce reports summarizing taxes paid.

In order to operate the Purchase Taxes module, do the following:

• First, set up two types of tax tables within the PT module:

  • Tax Authority:  A tax authority is the governmental or regulatory organization to which taxes are paid.

  • Tax Code:  A tax code is a user-defined code specifying tax type, tax rate, ledger, tax expense account(s), and tax payable account(s).

• Then, as vendors are established in AP, designate a tax type for vendors submitting taxable invoices.

• When taxable invoices are processed in AP, specify a tax code. The system validates it against the tax table created in the PT module to ensure that it is a valid tax code for that vendor. Then, the system calculates the tax amount. Tax amounts can be manually overridden, if necessary.

• Tax Codes may be entered at the invoice or line level.

  • For tax amounts at the Invoice Level, the system automatically applies the tax to every line item of the invoice.

  • For tax amounts at the Line Level, the system applies the tax at the individual line level.

• After processing invoices using the AP module, produce reports summarizing taxes paid using the Purchase Taxes module.
  
  
  
  

Modules to Set Up Before Purchase Taxes

IFS IDEAS requires that the General Ledger and Accounts Payable modules be set up before the Purchase Taxes module can be set up.

Purchase Taxes Setup Procedures

To use the Purchase Taxes module, complete the following steps in the chart.  Each step requires clicking a button or selecting a function from a drop-down menu and completing the screen(s) that IFS IDEAS displays.  Please see the Screen-by-Screen Instructions section for detailed instructions on how to complete each screen.

Screen-by-Screen Instructions

The Purchase Taxes module offers functions to support all activities required to calculate, capture, and report government taxes imposed on companies. There are several ways to access a function.  IFS IDEAS organizes functions in menus. The chart below details the two menus and the functions that fall under each.

IFS IDEAS also provides quick and easy access to the two most commonly used functions by clicking on the associated button:

 Tax Code

 Tax Authority

Export to Excel Feature

Some screens in this module may have an Export to Excel   button incorporated into the screen or an Export to Excel  icon in the toolbar.  The user can click on this button or icon to export the raw report data directly to an Excel spreadsheet, bypassing the report.  This feature is useful as it allows clients to use Excel features (for example, pivot tables, etc.) to organize the data as desired.

Tables Menu

The Tables Menu allows users to set up tax tables within the PT module. These tax tables consist of:

• Tax Authority

• Tax Codes

• Tax Types

See the following screen-by-screen descriptions of how to use each function.

Tax Authority

Use the Tax Authority function to add, delete, or modify tax authority records in the Tax Authority Table. A tax authority is the governmental or regulatory organization to which taxes are paid.

Processing the Tax Authority Screen

Click on the  button to load the Tax Authority  function, or select Tax Authority from the Tables menu.

Open

Click on buttons or type information into the following text boxes to specify the criteria for the tax authority:

• Tax Authority  – To edit an existing tax authority, either type in a tax authority code or select one from the drop-down list. To create a new tax authority code, click on the drop-down list and select <New>, or click on the Create New Row toolbar button. Then, type in a unique user-defined code to identify the tax authority. The code may be up to 10 characters long.

• Primary Auth Description – If you are viewing an existing code, the primary authority description appears in the text box. If you are creating a new tax authority, enter the primary description for the tax authority.

• Secondary Auth Description – If you are viewing an existing code, a secondary authority description appears in the text box. If you are creating a new tax authority , enter the secondary description for the tax authority.
  
  
  

Tax Codes

Use the Tax Codes function to create and maintain tax codes to use with the Accounts Payable module.  When creating a tax code, specify a description of the tax code, the tax rate, and the tax type (value added, withholding, or incremental).  Specify the ledger. Then specify expense account(s) and/or tax payable account(s) on the Tax Expense Accounts and/or Tax Payable Accounts tabs.

Processing the Tax Codes Screen

Click on the  button to load the Tax Codes function, or select Tax Codes from the Tables menu.

Open

Parts of the Tax Codes Screen

The Tax Codes screen has two distinct sections – a header and tab section.  The header contains a set of text boxes and toolbar buttons that are always visible on the screen.

The tab section of the screen contains two tabs:  Tax Expense Accounts and Tax Payable Accounts.  These tabs display one at a time. Click a tab name to change the tab that displays.

Tax Codes Header

• Entity – If there is only one entity defined, it appears automatically. Otherwise, click on the drop-down arrow and select an entity code.

• Tax Code  – Click on the drop-down arrow and select an existing tax code, or type in a tax code. To create a new tax code, click on the Create New Row toolbar button or click on the drop-down list and select <New>. Then, type in a unique user-defined code to identify the tax code. The code may be up to 10 characters long.

• Long Description – If an existing code is selected, the long description displays in the text box.  When creating a new tax code, enter a long description.

• Short Description – If an existing code is selected, a short description displays in the text box.  When creating a new tax code, enter a short description.

• Tax Rate  – If an existing code is selected, the tax rate displays in the text box. When creating a new tax code, enter a tax rate.

• Tax Type – If an existing code is selected, a tax type displays in the text box. When creating a new tax code, click on the spyglass and select a tax type from the pop-up window.

• Ledger – If there is only one ledger defined, it displays automatically. When creating a new tax code, click on the drop-down arrow and select an existing ledger.

• Status

  • Active – Allows the tax code to be used in invoices.

  • Inactive – Prevents the tax code from being used in invoices. The tax code is eliminated from selection lists in Invoice Entry, and the tax code cannot be typed in manually. However, reporting is still possible on Inactive Tax Codes.

  
  
  

Tax Expense Accounts Tab

The following text boxes exist on the grid on the Tax Expense Accounts tab.  Complete or review, as applicable:

• Tax Expense FQA  – If an existing tax code is selected, a tax expense fully qualified account (FQA) appears in the grid. When creating a new tax code, enter element IDs into the grid until the tax expense FQA is complete.  There may be more than one Tax Expense FQA per tax code.

  • In the grid there are a number of columns to contain the elements of each FQA as defined in the general ledger.  The exact number of elements in the FQA is unique to each installation. Therefore, the number of columns is unique. 

• Tax Authority  – If an existing tax code is selected, a tax authority code appears in the grid. When creating a new tax code, enter the appropriate tax authority code into the grid for each Tax Expense FQA that exists on the grid.

• Percent – If an existing code is entered, a number appears in the grid. When creating a new tax code, enter the appropriate percentage into the grid for each Tax Expense FQA that exists on the grid.

  • The sum of all numbers in the Percent column on the grid must equal the Tax Rate.

Tax Payable Accounts Tab

The following text boxes exist on the Tax Payable Accounts tab. Complete or review, as applicable:

• Tax Payable FQA  – If an existing tax code is selected, a tax payable FQA appears in the grid. When creating a new tax code, enter element IDs into the grid until the tax payable FQA is complete. More than one Tax Payable FQA may exist per tax code.

• Tax Authority  – If an existing tax code is selected, a tax authority code appears in the grid. When creating a new tax code, enter the appropriate tax authority code into the grid for each Tax Payable FQA that exists on the grid.

• Percent – If an existing code is selected, a number appears in the grid. When creating a new tax code, enter the appropriate percentage into the grid for each Tax Payable FQA that exists on the grid.

  • The sum of all numbers in the Percent column on the grid must equal the Tax Rate.

Tax Types

The Tax Types utility allows editing of the descriptions of system-defined codes that identify the types taxes used with various drop-down menus in the AP module.

Following is a list of all tax types:

Processing the Tax Types Screen

 To load the Tax Types function, select Tax Codes from the Tables menu.

Open

Follow these instructions to edit the description of a Tax Type code:

• Tax Type – Click on the drop-down arrow and select a Tax Type code to edit. 

• Primary Description – When a Tax Type is selected, its primary description appears in the text box automatically. Type a new description over the existing description, if desired.

• Secondary Description – When a Tax Type is selected, its secondary description appears in the text box automatically. Type a new secondary description over the existing description, if desired.

Reports Menu

The Reports functions allow users to create purchase taxes reports. Existing reports include:

• Tax Codes Detail

• Value Added Tax Paid

• Value Added Tax Paid/Unpaid

• Withholding Tax Paid

• Withholding Taxes Paid/Unpaid Summary

• Incremental Tax Paid

Information provided by these reports will be as current as the last transaction entered into the system. The following sections discuss each report in further detail.

Tax Codes Detail

The Tax Codes Detail function allows users to generate a detailed report of tax codes, rates, and accounts. The detail report lists the following for each tax code:

• Tax Type

• Tax Description

• Tax Rate

• Tax Ledger

• Tax Expense Fully Qualified Account

• Tax Payable Fully Qualified Account

Processing the Tax Codes Detail Report

To load the Tax Codes Detail Report function, select Tax Codes Detail from the Reports menu.

• Entity – If there is only one entity defined, it displays automatically.  Otherwise, click on the drop-down arrow and select an entity code on which to report.

• Description – When you select an entity, the description for that entity displays.  This is for informational purposes only.
  
  
  

Value Added Tax Paid Report

The Value Added Tax Paid Report allows users to generate a detailed report of VAT taxes paid.  The report lists the following:

• Vendor Number

• Vendor Name

• Vendor Tax ID

• Invoice Number

• Invoice Date

• Invoice Amount

• Tax Basis

• Tax Rate

• Tax Code

• Tax Paid Amount

• Total Tax Paid
  
  
  

Processing the Value Added Tax Paid Report 

Select the VAT Paid Report from the Reports menu.

• Entity – If there is only one entity defined, it displays automatically. Otherwise, click the drop-down arrow and select the desired entity code.

• Currency – If there is only one currency defined for the selected entity, it will display automatically. Otherwise, click the drop-down arrow and select the desired currency.

• Date Selected – Click to select one of three options, then complete the text boxes that are activated.

  • One or Multiple Dates – Use this option to select a single date or several individual dates for the report. This option will activate the Date text box.

  • Range of Dates – Use this option to select a range of dates for the report. This option will activate the Beginning Date and Ending Date text boxes.

  • All Dates – Use this option to generate a report for all available dates.

• Selection Criteria

  • Payment Date – Select VAT Paid information based on check date(s) specified.

  • Invoice Date – Select VAT Paid information based on receipt date(s) specified.

  • Accounting Period – Select VAT Paid information based on accounting period(s). specified.

• Beginning Date – This field will be activated if the Range of Dates option is selected. Enter the desired beginning date or use the calendar button to make a selection.

• Ending Date – This field will be activated if the Range of Dates option is selected. Enter the desired ending date, or use the calendar button to make a selection.

• Date – This field will be activated if One or Multiple Dates is selected. Enter the desired date(s), or use the calendar button to make a selection. Use the tab key to move the date to the Selected box.

• Remove – This button is activated when a date is moved to the Selected box. Use this button to correct mistakes in date selection.

• Accounting Period – If the Accounting Period option is selected under Selection Criteria, the fields in this section will be activated. Enter the Beginning Period, Ending Period, and Accounting Year.

Once all selections have been made, click the Print Preview button to generate the report. The report will open in a Crystal Reports viewer. It can be reviewed on the screen, exported, or printed.

Value Added Tax Paid/Unpaid Report

The Value Added Tax Paid/unpaid Report allows users to create a detailed report of taxes paid and taxes still outstanding. The report lists the following:

• Vendor Name

• Vendor Number

• Invoice Number

• Invoice Total

• Check Number

• Check Date

• Tax Rate

• Tax Code

• Tax Amount Paid

• Total Tax Paid

• Total Tax Unpaid
  
  
  

Processing the Value Added Tax Paid/Unpaid Report

Select Value Added Tax Paid/Unpaid from the Reports menu.

Open

• Entity – If there is only one entity defined, it appears automatically.  Otherwise, click the drop-down arrow and select the desired entity code. 

• Currency – If there is only one currency defined for the selected entity, it will appear automatically. Otherwise, click the drop-down arrow and select the desired currency.

• Date Selected – Click to select one of three options, then complete the text boxes that are activated.

  • One or Multiple Dates – Use this option to select a single date or several individual dates for the report. This option will activate the Date text box.

  • Range of Dates – Use this option to select a range of dates for the report. This option will activate the Beginning Date and Ending Date text boxes.

  • All Dates – Use this option to generate a report for all available dates.

• Selection Criteria

  • Invoice Date – Select VAT Paid/Unpaid information based on receipt date(s) specified.

  • Accounting Period – Select VAT Paid/Unpaid information based on accounting period(s) specified.

  • Beginning Date – This field will be activated if the Range of Dates option is selected. Enter the desired beginning date, or use the calendar button to make a selection.

  • Ending Date – This field will be activated if the Range of Dates option is selected. Enter the desired ending date, or use the calendar button to make a selection.

  • Date – This field will be activated if One or Multiple Dates is selected. Enter the desired date(s), or use the calendar button to make a selection. Use the tab key to move the date to the Selected box.

  • Remove – This button will be activated when a date is moved to the Selected box. Use this button to correct mistakes in date selection.

  • Accounting Period – If the Accounting Period option is selected under Selection Criteria, the fields in this section will be activated. Enter the Beginning Period, Ending Period, and Accounting Year.

Once all selections have been made, click the Print Preview button to generate the report. The report will open in a Crystal Reports viewer. It can be reviewed on the screen, exported or printed.

Withholding Tax Paid Report

The Withholding Tax  Paid  Report allows users to create a detailed report of withholding tax paid.  The report lists the following:

• Vendor Name

• Vendor Number

• Invoice Number

• Invoice Total

• Check Number

• Check Date

• Tax Rate

• Tax Code

• Tax Amount Paid

• Total Tax Paid
  
  
  

Processing the Withholding Tax Paid Report

Select Withholding Tax Paid from the Reports menu.

Open

• Entity – If there is only one entity defined, it displays automatically.  Otherwise, click the drop-down arrow and select the desired entity code. 

• Currency – If there is only one currency defined for the selected entity, it will display automatically. Otherwise, click the drop-down arrow and select the desired currency.

• Date Selected – Click to select one of three options, then complete the text boxes that are activated.

  • One or Multiple Dates – Use this option to select a single date or several individual dates for the report. This option will activate the Date text box.

  • Range of Dates – Use this option to select a range of dates for the report. This option will activate the Beginning Date and Ending Date text boxes.

  • All Dates – Use this option to generate a report for all available dates.

• Beginning Date – This field will be activated if the Range of Dates option is selected. Enter the desired beginning date or use the calendar button to make a selection.

• Ending Date – This field will be activated if the Range of Dates option is selected. Enter the desired ending date or use the calendar button to make a selection.

• Date – This field will be activated if One or Multiple Dates is selected. Enter the desired date(s) or use the calendar button to make a selection. Use the tab key to move the date to the Selected box.

• Remove – This button is activated when a date is moved to the Selected box. Use this button to correct mistakes in date selection.

Once all selections have been made, click the Print Preview button to generate the report. The report will open in a Crystal Reports viewer. It can be reviewed on the screen, exported, or printed.

Withholding Tax Paid/Unpaid Summary Report

The Withholding Tax Paid/Unpaid Report allows users to create a detailed report of taxes paid and taxes still outstanding. The report lists the following:

• Vendor Name

• Vendor Number

• Invoice Date

• Entry Date

• Invoice Amount

• Total Tax – Percentage and Amount

• Tax Charged – Percentage and Amount

• Incremental Tax – Percentage and Amount

• Tax Code

• Tax Rate 

• Total Invoice Amount

• Tax Paid Amount
  
  
  

Processing the Withholding Tax Paid/Unpaid Summary Report

Select Withholding Tax Paid/Unpaid Summary from the Report menu.

Open

• Entity – If there is only one entity defined, it displays automatically.  Otherwise, click the drop-down arrow and select the desired entity code. 

• Currency – If there is only one currency defined for the selected entity, it will display automatically. Otherwise, click the drop-down arrow and select the desired currency.

• Date Selected – Click to select one of three options, then complete the text boxes that are activated.

  • One or Multiple Dates – Use this option to select a single date or several individual dates for the report. This option will activate the Date text box.

  • Range of Dates – Use this option to select a range of dates for the report. This option will activate the Beginning Date and Ending Date text boxes.

  • All Dates – Use this option to generate a report for all available dates.

• Beginning Date – This field will be activated if the Range of Dates option is selected. Enter the desired beginning date, or use the calendar button to make a selection.

• Ending Date – This field will be activated if the Range of Dates option is selected. Enter the desired ending date, or use the calendar button to make a selection.

• Date – This field will be activated if One or Multiple Dates is selected. Enter the desired date(s), or use the calendar button to make a selection. Use the tab key to move the date to the Selected box.

• Remove – This button is activated when a date is moved to the Selected box. Use this button to correct mistakes in date selection.

Once all selections have been made, click the Print Preview button to generate the report. The report will open in a Crystal Reports viewer. It can be reviewed on the screen, exported, or printed.

Incremental Tax Paid Report

The Incremental Tax Paid Report allows users to create a detailed report of Incremental taxes paid.  The report lists the following:

• Vendor Name

• Vendor Number

• Invoice Date

• Entry Date

• Invoice Amount

• Total Tax – Percentage and Amount

• Tax Charged – Percentage and Amount

• Incremental Tax – Percentage and Amount

• Tax Code

• Tax Rate 

• Total Invoice Amount

• Tax Paid Amount

Processing the Incremental Tax Paid Report

Select Incremental Tax Paid from the Reports menu.

Open

• Entity – If there is only one entity defined, it displays automatically.  Otherwise, click the drop-down arrow and select the desired entity code. 

• Currency – If there is only one currency defined for the selected entity, it will display automatically. Otherwise, click the drop-down arrow and select the desired currency.

• Date Selected – Click to select one of three options, then complete the text boxes that are activated.

  • One or Multiple Dates – Use this option to select a single date or several individual dates for the report. This option will activate the Date text box.

  • Range of Dates – Use this option to select a range of dates for the report. This option will activate the Beginning Date and Ending Date text boxes.

  • All Dates – Use this option to generate a report for all available dates.

• Beginning Date – This field will be activated if the Range of Dates option is selected. Enter the desired beginning date, or use the calendar button to make a selection.

• Ending Date – This field will be activated if the Range of Dates option is selected. Enter the desired ending date, or use the calendar button to make a selection.

• Date – This field will be activated if One or Multiple Dates is selected. Enter the desired date(s), or use the calendar button to make a selection. Use the tab key to move the date to the Selected box.

• Remove – This button is activated when a date is moved to the Selected box. Use this button to correct mistakes in date selection.

Once all selections have been made, click the Print Preview button to generate the report. The report will open in a Crystal Reports viewer. It can be reviewed on the screen, exported, or printed.