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Automatically generate Tax line after apply prepayment. (AP)

Discussion in 'Oracle Financials' started by yingsras, Jul 19, 2012.

  1. yingsras

    yingsras Forum Advisor

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    Hi everyone,

    I have Prepayment invoice and also have tax. Then I created Standard invoice that didn't have tax.
    But after apply to the Prepayment mentioned earlier, the Tax line was automatically generated.
    Is this the standard? I don't want standard invoice has Tax item. Is there any configuration on this?
    Could you please advise?

    Thanks,
    Ying
     
  2. Ramji

    Ramji Forum Guru

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    Yings,

    Bharat has been testing this recently and should eb able to guide you.
    cheers
    Ramji
     
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  3. Bharat

    Bharat Community Moderator Forum Guru

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    Hi Ying,

    Clear the tax lines in prepayment invoices by using tax details button at invoice level. Here you can check cancel option for tax lines. After checking these lines it wont apply any taxes to your prepayment invoices.

    Yes that was an standard thing which happens when you apply prepayment invoices which having taxes to other standard invoices.
    Here you need to check only line amount by that each and every step will be clear for you.

    We did one prepayment invoice with 200 line amount and tax applied for this is 13.80 which contains (state, county and city levels). And now created other standard invoice with 500 line amount tax is applied for this is 34.50. So if you apply this prepayment invoice then it reduces that 200 from 500 and 13.80 from 34.50 amounts respectively. So if you don't have tax lines for both invoices then there is not confusion like this.

    Please check out only lines amount and look into that step by step whats happening there. By that we can understand whats going there with them.
     
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  4. yingsras

    yingsras Forum Advisor

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    Hi Bharat,

    Thank you very for testing on this.
    But I don't want to cancel tax line on Prepayment Invoice. Because my Prepayment Invoice has tax amount.
    I already tried to cancel tax line on Standard Invoice but the field is protect against to update.
    From your reply, that means if Prepayment Invoice has tax, the standard invoice will has tax after apply prepayment ?

    Thanks,
    Ying
     
  5. Bharat

    Bharat Community Moderator Forum Guru

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    Dear Ying,

    Prepayment Invoice: - 213.80 Amount (200.00 (line amt) + 13.80 (tax))

    Standard Invoice: - 200 Amount with out tax.

    If you apply this Prepayment invoice to Standard Invoice then it will just compare the amount with lines amount and deduces from it.

    Now here Standard Invoice is having 200.00 amount as lines amount and in prepayment invoice having 200.00 amount as lines amount. So it deduces exactly from lines.

    But in standard invoice it shows tax amounts also. It means they are not meant for that standard invoice. That tax lines are for prepayment invoice's one. It doesn't apply that tax amount to that standard invoices.

    In the same way if we have prepayment invoice less amount and standard invoice without tax has some more amount than prepayments then it deduces from only lines amount. Thats all. The tax amount which shows in standard invoice is referred to prepayment invoice lines.
     
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  6. yingsras

    yingsras Forum Advisor

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    Hi Bharat,

    Got it. Thank you very much for the update.

    Thanks,
    Ying
     
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  7. sunday

    sunday Active Member

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    Hi Bharat,

    I am facing the issue same with Ying's. I am not sure whether the journal is correct. I have test this instance and below is my result.
    I use accrual basis method.
    Create prepayment with tax:
    Prepaid 200
    Tax 13.8
    Liability 213.8

    Create payment for prepayment :
    Liability 213.8
    Cash 213.8

    Create standard invoice without tax and apply with prepayment
    Expense 200
    Liability 200
    Liability 213.8
    Prepaid 213.8

    Based on those journals, we can see we have liability account that wont be balanced (more 13.8). Could you please explain this? however, no issue when we posted to GL.

    Thanks,
    hans
     
  8. Bharat

    Bharat Community Moderator Forum Guru

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    The tax which is appearing at line level for standard invoice is of prepayment invoice tax. It wont applicable to the standard invoice. I think it comes under prepayment line. So take the amount just based on standard invoice number itself. This may helps you.
     
  9. sunday

    sunday Active Member

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    Hi Bharat,

    Yes, I understand the tax below is owned by prepayment. However, my concern is the journal. If we see, the balance journal created will always incorrect for liability account, we will have overage (as big as tax amount) if standard has no tax while prepayment has a tax.
    When apply prepayment, amount will always refer to original prepayment amount, however when run create accounting, the apply prepayment journal will include prepayment tax.
    Based on your experience, how you handle this trial balance for liability regarding this issue? or perhaps, is there any setting for automated journal to offset exceeded amount on liability?

    Thanks,
    hans
     
  10. Ramji

    Ramji Forum Guru

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    Hello,

    Please refer to the Payables user guide , If I remember 3.198 which spelt out the workaround to avoid this tax variance accounting.
    cheers
    Ramji
     
  11. sunday

    sunday Active Member

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    Hi Ramji,

    I have read the document, tried recreate tax with 'Prorate' Applied Amount Handling option setup. However after create accounting, it is still issue. The liability amount when apply prepayment, still added with prepayment tax amount therefore it is still overage. Did I miss something?

    Thanks,
    Hans
     
  12. Ramji

    Ramji Forum Guru

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    Dear Hans,

    Can you upload a word document with step by step screenshots. I shall take a look for you during the weekend. Just zapped.
    Ramji
     
  13. sunday

    sunday Active Member

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    Hi Ramji,

    Sorry for late response, please find the upload file.

    Thanks,
    Hans
     

    Attached Files: