Invoices with Inclusive Sales Taxes: Process Activity

The following activity will walk you through the process of creating and releasing an AR invoice with an inclusive document-level sales tax.

Story

Suppose that the SweetLife Fruits & Jams company provides the services of installing juicers and cleaning services, which are subject to a sales tax. On February 13, 2024, one of the SweetLife customers, Morning Cafe purchased the installation and cleaning services.

Acting as the SweetLife accountant, you need to create an AR invoice, and you want the system to calculate the sales tax for the whole document, but not for each document line. The total amount of the invoice should include the tax amount.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

Process Overview

In this activity, you will create an invoice on the Invoices and Memos (AR301000) form, adding two lines to it with taxable non-stock items. On the Taxes tab, you will review the tax applied to the invoice automatically. You will then release the invoice and review the GL transaction generated by the system on the Journal Transactions (GL301000) form.

System Preparation

Before you begin performing the steps of this activity, do the following:

1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as an accountant Anna Johnson by using the johnson username and the 123 password.
2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to 2/13/2024. If a different date is displayed, click the Business Date menu button, and select 2/13/2024 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
3. On the Company and Branch Selection menu on the top pane of the MYOB Acumatica screen, make sure that the SweetLife Head Office and Wholesale Center branch is selected. If it is not selected, click the Company and Branch Selection menu button to view the list of branches that you have access to, and then click SweetLife Head Office and Wholesale Center.
4. As a prerequisite activity, configure the output inclusive sales tax as described in Invoices with Inclusive Sales Taxes: Implementation Activity.

Step 1: Creating and Releasing an Invoice with the Inclusive Sales Tax

To create and release an AR invoice with the sales tax applied to it, proceed as follows:

1. Open the Invoices and Memos (AR301000) form.
   Tip: To open the form for creating a new record, type the form ID in the Search box, and on the Search form, point at the form title and click New right of the title.
2. Click Add New Record on the form toolbar, and specify the following settings in the Summary area:
   • Type: Invoice
   • Customer: MORNINGCAF
   • Terms: 30D (inserted by default based on the selected customer)
   • Date: 2/13/2024 (the current business date, which is inserted by default)
   • Post Period: 02-2024 (inserted by default based on the selected date)
   • Description: Installation and cleaning services
3. On the Details tab, click Add Row, and specify the following settings for two rows:

   Branch	Inventory ID	Ext. Price	Tax Category
   HEADOFFICE	CLEANING	30	TAXABLE
   HEADOFFICE	INSTALL	96	TAXABLE

4. On the form toolbar, click Save to save your changes.
5. On the Taxes tab, review the tax that was applied to the invoice.

   The lines with the CLEANING and INSTALL items are assigned the TAXABLE tax category, which contains the NYINCTAX tax. The NYSTATE tax zone, which includes the NYINCTAX tax, is specified for the customer for which the document is created. The tax calculation rule for the NYINCTAX tax, which is assigned to both the tax category and the tax zone, is Inclusive Document-Level, which means that the tax is applied to the document amount and is included in it. The taxable amount is $115.73 and the calculated document-level tax is $10.27.

6. On the form toolbar, click Remove Hold, then click Release to release the invoice.

Step 2: Reviewing the GL Transaction Generated on Invoice Release

To review the GL transaction that was generated when the system released the invoice, proceed as follows:

1. While you are still viewing the AR invoice on the Invoices and Memos (AR301000) form, on the Financial tab, click the Batch Nbr. link.
2. On the Journal Transactions (GL301000) form, which is opened, review the transactions that were generated on release of the invoice.

   On release of the invoice, the system has generated the following transactions:

   • The Accounts Receivable account of the customer (11000) is debited in the total amount of the invoice (the total of all lines plus the calculated tax).
   • The Sales Revenue account for each item (40000) is credited in the amount specified in the document lines minus the tax.
   • The Tax Payable account specified for the tax (24100) is credited in the calculated tax amount.
   • The Tax Rounding Gain / Loss account (83110) is credited in the tax rounding gain amount.