Tricks to maneuvre around Tax Liability

CASE STUDY A construction company has 3 responsibility centers. It is reported that, from time to time, it gets necessary for the accounting team to make fictitious cross posting of invoices among the responsibility centers; to get advantage of tax accrual times. Therefore, say an invoice which is actually for a job at site (resp center) A, is posted to the accounts of site B on purpose. Consequently, this invoice will appear only in the accounts and financial reports of site B. This is obvious. However, when this action is taken; it is obvious that, the Project Planning Department is facing a lot of difficulty to manage the site by time, cost and budgets etc. because of the fictitious postings. QUESTION At this point now, the challenge starts. We are asked to build a code or develop the current standard Navision w1 3.70 business logic; so that in all the reports that the Project Planning department is using, they will have the ability of using or disregarding those fictitious records of invoices, so that they can do their job as smooth as it could be. Is there a solution here? If so, what is it? Is this possible just by assigning Dimensions and binding them to certain dirty invoices (as a flag perhaps), so that we have the chance of getting the reports indexed on different dimensions? Thanks for your guidance.

Its pretty straight forward really, basically it starts with your client relocating to a country that does not have taxes. Personally I would just be carefull about what you are getting into.

I want to correct one point, to avoid any misconduct. We are not seeking a method of escaping tax liability. It is clear in the question anyway. Please note that, we are just trying to find out if there is a method of posting an invoice to one account, whereas its value should be wiped out in one report, while making it appear in another account. The government is still getting the tax accrued; but thru another operation or at a different time in future. I was expecting a response, which would rather be technical. Thanks.

Then, sorry, your query is very hard to understand, and gives the impression that you are trying to DEFER tax, which is just as illegal as not paying tax. Can you try to explain what final result you are after. I don’t understand what you mean by

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…a method of posting an invoice to one account, whereas its value should be wiped out in one report, while making it appear in another account. …


Hi David, Lets make it this way: There is a XYZ FruitTrading company, who is just purchasing and selling “apples” and “bananas” only. Therefore, there are only 2 stock items. During a whole accounting period, the price of apples and bananas are equal. For any reason, say for 2 or 3 times a year, they need to post the purchasing invoice of apples as bananas. For example they purchase 100 kilograms of apples. The vendor sends 100 kilograms of apples. However, the vendor and the XYZ company agree that the invoice is prepared for 100 kilograms of bananas. Therefore, the XYZ company wants to post this invoice to the accounts of bananas. The reason for this action is totaly out of the scope of this question. The effect of this action will not change the financial and tax reporting, and they will be the same. However, for stock management purposes, they will be having difficulties in calculating the exact quantity in hand and therefore the reorder times etc. Just, at this point now, I am asking, if there is a way of finding a solution for this customer; to get correct reports of stock status. Could this be solved, by perhaps marking those invoices by a flag or something else (a dimension or what?) so that, the marked documents will appear at the requested stock item column? Hope it is clear this time. Thanks. Esat

I think I understand somethink like 5% [:)]. If it’s just a matter of changing how Navision posts to G/L (like You said in Your last post) You just need to make the column “Product Posting Group” visible on the purchase invoice subform. When You post the apples, first change to the product posting group for bananas. The purchase will go to the account for bananas and You will still have apples in stock. But I guess it’s not that simple. It sounded a bit more complex in Your first post…

Dear Lars, I know it is not a regular habbit, in the normal daily life. And, I know this is against the regular behaviour and integrated mechanism of the ERP system logic. The method you are offering is not the solution. Because, with product posting group you are fixing the need for stock management; but the primary concern of financial documents will not be fullfilled. Think of this requirement as a “conditional marking” of the document. With this conditional marking, although the accounting department is using the purchasing document, the stock control department will use it in the manner as this marking instructs. (Or, am I getting a little more complex? [?]) Thanks