Defaulting Tax in Payables
You can set up your Payables system to default tax names based on your business needs. You set the Tax Name Defaults hierarchy in the Tax Name Defaults region of the Payables Options window to determine 1) which sources you use for tax names, and 2) the order in which Payables will search the sources to find a valid tax name value.
Payables uses the Tax Name Defaults option to provide a default tax name for documents throughout the system. Note that certain documents cannot use some sources, and Payables will skip these sources when it searches through the hierarchy for a tax name. The following table shows the sources that documents throughout the system can use.
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|
| Purchase
Order
| Supplier Site
| Supplier
| Natural Account
| Financials Options
| Invoice Header
| Template
|
| Invoice matched to PO
|
|
|
|
|
|
| N/A
|
| Unmatched invoice (all types)
| N/A
|
|
|
|
|
|
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| Price increase or decrease to PO
|
|
|
|
|
|
| N/A
|
| Credit/debit memo matched to PO
|
|
|
|
|
|
| N/A
|
| Unmatched credit/debit memo
| N/A
|
|
|
|
|
|
|
| Prepayment
| N/A
|
|
|
|
|
| N/A
|
| Expense report
| N/A
| N/A
| N/A
|
|
| N/A
|
|
| Invoice imported via Open Interface Import
|
|
|
|
|
|
|
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| Expense report template
| N/A
| N/A
| N/A
|
|
| N/A
| N/A
|
| Distribution set
| N/A
| N/A
| N/A
|
|
| N/A
| N/A
|
Setting the Tax Name Source Hierarchy to Duplicate Functionality in Previous Releases
If you are upgrading to Release 11 or later and you do not want to change your tax defaulting functionality, then keep the defaults Payables sets during the upgrade:
| Invoice Header
| 1
|
| Template
| 2
|
| Supplier Site
| 3
|
| Supplier
| null
|
| Financials Option
| null
|
| Natural Account
| null
|
| PO for Matched Invoices
| null
|
Tax Defaulting Restrictions and Considerations
Attention: Although the Tax Name Defaults Payables option allows you flexibility, there are many issues you need to consider when you set up your tax hierarchy to avoid problems in your system:
- If you use Automatic Tax Calculation at the Header level, we strongly recommend that you do not include the Natural Account source in your ranking. Otherwise, you risk having incorrect Tax Names on your distributions. For example, if you use Automatic Tax Calculation at the Header level, the system will automatically create a tax distribution for you based on the Tax Name in the Invoices window. (The Invoice Header has no account for which the system can assign a tax name). When you enter the distributions, Payables will automatically assign the natural account tax name to each distribution that has an account with a tax name associated with it. The tax distribution based on the invoice header may no longer correspond to the tax names assigned to the non-tax distributions. If this is true, then Approval will place a Natural Account Tax Hold on the invoice.
- If you enable the Enforce PO Tax Name option in Payables, you must enable the PO for Matched Invoices source when you set up your hierarchy.
- The system will ignore the purchase order source unless the document is matched to a purchase order.
- The Enforce Tax From Account option in the Payables Options window is not enforced until Approval.
- After an invoice or distribution has been created using a default from one of the seven sources, if you change the tax name value of the source, the system will not provide the changed default.
- If Payables uses the Template source, it defaults the Tax Name value even if the value in the Distribution Set or expense report template is null.
