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Tax treatment in POAC Accrual Engine

Ayush_Rawat
Newcomer
0 Kudos
89

Hi All, 

The problem statement is that in our company US doesn't have tax config in place from PTP side(part of the design), the tax added in invoice is considered as usual expense and adds it to the regular expense GL. This causes that invoice expense amount gets increase with the tax amount. For example, PO created with USD 10000 gets invoiced with USD 11000(10000+1000-Tax).
We have a configuration for deferrals as part of accrual engine which kicks in when we receive the invoice before the delivery date. Now this scenario will lead to an entry that your expense amount will be transferred to Prepaid GL, attaching the screenshot showing this- line item 3 and 4 are generated as part of this config where your expense amount is reclassed to Prepaid GL. Now problem is that PO is created without tax(70720 in screenshot) and invoice is generated with tax in expense(75140), system is only reclassing upto original PO amount(70720 in line item 3 and 4), which is as per the system behaviour. 

Could you please let me know if any of you have found this case in your company and how did you handled it? Thanks a lot !!

Screenshot 2024-03-18 at 7.10.39 PM.png

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