Direct Tax Payment: To Create an AP Bill with a Direct-Entry Tax

The following activity will walk you through the process of creating an AP bill containing a line with a direct-entry tax.

Story

Suppose that on 1/20/2024, SweetLife Fruits & Jams purchased two juicers from Jalooza Inc. in a total amount of $4,000. On 1/30/2024, SweetLife received a tax bill from the freight company (Big Green Trucks Ltd.) that assisted SweetLife with importing the goods from Canada and is SweetLife's customs agent. The bill includes a taxable fee for the company's services ($55) and an import tax ($300).

Acting as a SweetLife accountant, you need to process two documents in the system—a purchase order for Jalooza, and an AP bill for Big Green Trucks, which includes both an expense line and a direct-entry tax.

Configuration Overview

In the U100 dataset, the following configuration tasks have been performed to prepare the system for this activity to be performed:

  • On the Enable/Disable Features (CS100000) form, the VAT Reporting feature has been enabled.
  • On the Tax Categories (TX205500) form, the TAXABLE tax category has been configured.
  • On the Vendors (AP303000) form, the JALOOZA and GREENTRUCK vendor accounts have been configured.
  • On the Stock Items (IN202500) form, the JUICER15 stock item has been configured.

Process Overview

In this activity, you will first update the settings of the vendors on the Vendors (AP303000) form. On the Purchase Orders (PO301000) form, you will create and process a purchase order for the JALOOZA vendor. On the Bills and Adjustments (AP301000) form, you will review the AP bill that was generated automatically on release of the purchase receipt. On the Tax Zones (TX206000) form, you will update the settings of the FOREIGN tax zone assigned to the GREENTRUCK vendor, so that this tax zone should include the VAT and VATIM taxes. On the Bills and Adjustments (AP301000) form, you will create a bill for the GREENTRUCK vendor with a line for taxable services and a tax line. After releasing the bill, you will review the generated transaction on the Journal Transactions (GL301000) form.

System Preparation

To prepare the system, do the following:

  1. Launch the MYOB Acumatica website, and sign in to a company with the U100 dataset preloaded. You should sign in as an accountant 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, set the business date in your system to 1/20/2024.
  3. On the Company and Branch Selection menu, on the top pane of the MYOB Acumatica screen, select the SweetLife Head Office and Wholesale Center branch.
  4. As a prerequisite activity, in the company to which you are signed in, be sure you have configured the VATTAX tax agency as described in Tax Agency: To Set Up a Tax Agency for VAT.
  5. As a prerequisite activity, be sure that you have configured the tax report as described in Tax Report Configuration: To Create a Tax Report for VAT.
  6. As a prerequisite activity, be sure that you have created the direct-entry tax as described in Direct Tax Payment: To Create a Tax Bill for a Tax Agency.

Step 1: Updating the Vendors' Tax Zones

To update the tax zones of the JALOOZA and GREENTRUCK vendors, do the following:

  1. Open the Vendors (AP303000) form.
  2. In the Vendor ID box, select JALOOZA.
  3. On the Purchase Settings tab, select CANADA in the Tax Zone box.
  4. On the form toolbar, click Save.
  5. In the Vendor ID box, select GREENTRUCK.
  6. On the Purchase Settings tab, select FOREIGN in the Tax Zone box.
  7. On the form toolbar, click Save.

Step 2: Processing a Purchase Order for Jalooza

To process a purchase order for two juicers for Jalooza, do the following:

  1. On the Purchase Orders (PO301000) form, create a new record.
  2. In the Summary area, specify the following settings:
    • Type: Normal
    • Vendor: JALOOZA
    • Date: 1/20/2024 (inserted by default)
    • Description: Juicers
  3. On the Details tab, click Add Row, and specify the following settings for the added row:
    • Branch: HEADOFFICE
    • Inventory ID: JUICER15
    • Warehouse: EQUIPHOUSE
    • Order Qty: 2
    • Ext. Cost: 4000 (calculated automatically)
    • Tax Category: TAXABLE
  4. On the form toolbar, click Save.
  5. Review the Taxes tab. Because the document line is assigned to the TAXABLE category and the vendor is assigned to the CANADA tax zone, the VAT tax has been applied to the purchase order.
  6. On the form toolbar, click Remove Hold. The purchase order is assigned the Open status.
  7. On the form toolbar, click Enter PO Receipt. The system prepares the purchase receipt for the selected purchase order and opens it on the Purchase Receipts (PO302000) form.
  8. On the form toolbar, click Save. Review the details of the prepared purchase receipt.
  9. In the Summary area, select the Create Bill check box. With this check box selected, the system will create an AP bill automatically when the purchase receipt is released.
  10. On the form toolbar, click Release.
  11. On the Billing tab, click the link in the Reference Nbr. column to review the automatically prepared bill.
  12. On the Bills and Adjustments (AP301000) form, which is opened, review the created bill.

    On the Taxes tab, notice that a 7% VAT in the amount of $280 has been applied to the bill.

Step 3: Updating the Tax Zone Settings

To update the settings of the FOREIGN tax zone, do the following:

  1. Open the Tax Zones (TX206000) form.
  2. In the Tax Zone ID box, select FOREIGN.
  3. On the Applicable Taxes tab, click Add Row on the table toolbar, and select VAT in the Tax ID column.
  4. On the form toolbar, click Save.

Step 4: Creating an AP Bill for Big Green Trucks

In this step, you will create an AP bill, which will have an expense line and a direct-entry tax, for Big Green Trucks. Do the following:

  1. On the Bills and Adjustments (AP301000) form, create a new record.
  2. In the Summary area, specify the following settings:
    • Type: Bill
    • Vendor: GREENTRUCK
    • Date: 1/30/2024
    • Post Period: 01-2024
    • Description: Tax bill
  3. Click Add Row on the table toolbar of the Details tab, and specify the following settings for the added row:
    • Branch: HEADOFFICE
    • Transaction Descr.: Service fee
    • Ext. Cost: 55
    • Account: 81000 (Other Expenses)
    • Project: X (Non-Project Code)
    • Tax Category: TAXABLE
  4. Click Add Row again, and specify the following settings for the second row:
    • Branch: HEADOFFICE
    • Transaction Descr.: Import tax
    • Ext. Cost: 300
    • Account: 81000 (Other Expenses)
    • Project: X (Non-Project Code)
    • Tax Category: IMPORT
  5. On the form toolbar, click Save.
  6. On the Financial tab, review the Vendor Tax Zone box. The vendor is assigned to the FOREIGN tax zone, which has been copied to the bill.
  7. Review the Taxes tab.

    Because the first document line is assigned to the TAXABLE category and the vendor is assigned to the FOREIGN tax zone, the VAT tax has been applied to the bill.

    The second document line is assigned to the IMPORT category, which is associated with the VATIM direct-entry tax. For this document line to which the VATIM direct-entry tax is applied, the full line amount is the Tax Amount, and the Taxable Amount is 0.00.

  8. On the form toolbar, click Remove Hold, and then click Release to release the bill.
  9. On the Financial tab, click the Batch Nbr. link; on the Journal Transactions (GL301000) form, which opens, review the generated GL transaction.

    On release of the tax bill, the system generated the following entries:

    • The Accounts Payable account of the vendor (20000) is credited in the Amount of the released tax bill ($358.85).
    • The Other Expenses account of the first document line (81000) is debited in the amount of the service fee ($55).
    • The Tax Claimable account (17000) is debited in the total amount of the 7% VAT and the 10% of VAT on import to be claimed from the tax agency ($303.85 = $53.85 + $300).