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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.

Tax Name Defaults to Payables Documents
  Purchase Order Supplier Site Supplier Natural Account Financials Options Invoice Header Template
Invoice matched to PO             N/A
Unmatched invoice (all types) N/A            
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              
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:

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