Scenario is we want to force the Sales Tax posting to be Cr instead of Dr.
We want to achieve the following US Purchases.
Dr. IT Expense 2,200
Cr. Sales Tax (200)
Cr. Vendor (2,000)
What set-up is required to achieve the above? Any help much appreciated.
Hi,
I have seen this quite a few times with US clients - the fix is simpler than it looks.
1. Tax Direction - Go to Tax > Indirect Taxes > Sales Tax Codes and set the Tax Direction to “Sales Tax Receivable”. That’s what flips it to the credit side.
2. Ledger Posting Groups - Make sure your Sales Tax Receivable GL account is correctly mapped under Tax > Setup > Ledger Posting Groups. That drives your Cr. 200.
3. Avoid Use Tax codes - If you’re using Use Tax, it’ll gross up the expense instead, which is not what you want here. Stick to standard sales tax codes.
That should give you the exact Dr. Expense / Cr. Tax / Cr. Vendor split you’re after. Let me know if you hit any issues!
Hi Hardik, can you please share the snippet. I cannot see this option 1. Tax Direction - Go to Tax > Indirect Taxes > Sales Tax Codes and set the Tax Direction to “Sales Tax Receivable”. That’s what flips it to the credit side.