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If you do not enable this option, Payables uses the gross amount (including the tax amount) of an invoice as the invoice amount applicable to discount. When you enter an invoice you can always override the default invoice amount applicable to discount.

Require Tax Entry at Header. If you enable this option, Payables requires you to enter a Tax Name and Tax Amount in the Invoices window when you enter an invoice. If you use Automatic Tax Calculation at the header level, Payables automatically will calculate a Tax Amount for you, so you are only required to enter a tax name if one has not defaulted from the supplier site.

If you have enabled this option and the invoice has no tax, in the Invoices window you enter a Tax Name with a zero-percent tax rate assigned to it.

If you enter a Tax Name and Tax Amount for an invoice, Payables automatically creates a tax distribution. You can adjust the tax distribution in the Distributions window.

You cannot enable this option if you select Line as your Calculation Level Payables option. If you allow override of the tax calculation level and you enter an invoice using Line level calculation, Payables will not require you to enter a Tax Name or Tax Amount in the Invoices window even if you have enabled the Require Tax Entry at Header option.

Do not enable this option if you want to enter Use type tax names on invoices. If you enable this option, Payables prevents you from entering Use tax names on invoices. In addition, when you enable this option and enter a Use type tax name as the default tax name for a supplier site, Payables does not assign the default to the invoices you enter for the supplier site.

You may not want to enable this option if you want to prorate tax across selected invoice distributions. If you enable this option, Payables automatically creates a tax distribution when you enter an invoice.

If the Require Tax Entry at Header Payables option is disabled when you enter an invoice, the Tax Name and Tax Amount fields are optional.

Use Automatic Tax Calculation. Select this option if you want to enable Payables to automatically calculate and enter tax on invoices. If this option is not enabled, Payables will disable Automatic Tax Calculation options throughout the system. If you disable this option after you have enabled it, Payables will not automatically calculate sales tax for any invoice.

If you want to use Automatic Tax Calculation for some invoices, and you also want to create tax distributions for other invoices by manually entering tax distributions, by prorating tax across selected invoice distributions, or by matching to purchase orders, enable this option. You can selectively disable Automatic Tax Calculation for a particular supplier, supplier site, or invoice. See: Disabling Automatic Tax Calculation.

If you do not enable this option, Payables does no tax calculation but will automatically create a tax distribution if you enter values for Tax Name and Tax Amount in the Invoices window. Payables copies the invoice tax name and tax amount values to the new tax distribution but does no tax calculation.

Calculation Level. If you enable the Use Automatic Tax Calculation option, select the level at which you want Payables to automatically calculate sales tax. This value defaults to new suppliers you enter. See also: Automatic Tax Calculation Level.

• Header. Automatically create tax distributions based on the Invoice Amount and Tax Name in the Invoices window:

• Line. Automatically create tax distributions based on the distribution Amount, Tax Name, and Includes Tax check box in the Distributions window:

The Calculation Level defaults in the following order: Payables Options -> Suppliers -> Supplier Site -> Invoices. You can adjust the default calculation level in the Supplier, Supplier Sites, and Invoices windows only if the Allow Override option is currently enabled in the previous window. You can enable the Allow Calculation Level override check box in the Suppliers window for new and existing suppliers only if the Allow Calculation Level Override check box in the Payables Options window is currently enabled. See also: Overriding Tax Calculation Level.

Rounding Rule. If you use Automatic Tax Calculation, select the method you want the system to use to round the tax amount. For example, the calculated tax is $5.988 and your Precision is 2 decimal places. If your rounding rule is Up, then Payables will enter 5.99 for the tax amount.

Payables uses the rounding rule you select to calculate tax on invoices, recurring invoices, and expense reports. This value defaults to new suppliers in Payables. You can override this value at any level.

You can override this value at any level. If you update it in the Payables Options window, it will not affect existing suppliers and will default only to new suppliers.

Payables rounds to the Minimum Accountable Unit if you entered a value for that field. Otherwise, it rounds to the Precision you enter. The examples below assume you are using a Minimum Accountable Unit of .01.

• Up. Round up. For example, round $5.988 to $5.99

• Down. Round down. For example, round $5.988 to $5.98

• Nearest. Round to the nearest number, and if the difference between Up and Down is equal, round Up. For example, round $5.988 to $5.99

Payables will use the lower of the precision entered here and the default precision for the functional currency. For example, if your functional currency is USD, and you enter a precision of 3, Payables will use a precision of 2.

Payables uses the value you enter for this option for all new tax distribution amounts Payables calculates automatically. This is the precision value for tax calculation throughout the system and you cannot override it anywhere else.

Payables will disregard any value you enter for Precision if you enter a Minimum Accountable Unit in the next field.

Minimum Accountable Unit. Indicate the smallest monetary unit to which you want to round the tax amount. For example, the calculated tax is $5.541 and your Rounding Rule is Nearest. If your Mimimum Accountable Unit is .01, the system will enter $5.54. If your Minimum Accountable Unit is .05, the system will enter $5.55.

Attention: Do not enter a minimum accountable unit that has more decimal places than your functional currency or your distribution amounts may not match your invoice amount after rounding. This may cause a distribution hold on your invoice.

Payables uses the value you enter for this option for all new tax distribution amounts Payables calculates automatically. The precision used in tax calculations will be the same number of decimal places as your Minimum Accountable Unit. This is the precision value for tax calculation throughout the system and you cannot override it anywhere else.

Distribution Amounts Include Tax. Enable this option if you use Automatic Tax Calculation at the Line level, and you want the Distribution Amounts Includes Tax check box to be enabled by default for all new suppliers you enter.

When the Distribution Amount Includes Tax check box is enabled at the supplier site, Payables subtracts the calculated tax from non-Tax (Item, Misc, Freight type) distributions when Payables automatically creates tax distributions. When you select this option at the supplier site, Payables always checks the Includes Tax check box for invoice distributions and recurring invoice templates. Note that this option does not apply to distributions created by Distribution Sets.

You cannot enable this option unless you enable Automatic Tax Calculation and you select Line as your Calculation Level.

This value defaults to the Distribution Amounts Include Tax option in the Payables Suppliers window, and you can change it in the Suppliers window if you enable the following option.

Allow Override. If you enable the Allow Override option, you can override the Distribution Amounts Include Tax check box default value for all suppliers and expense reports.

If you enable this option you can also adjust the Includes Tax check boxes in the Expense Report Templates window, and Recurring Invoices window.

Note that if you enable Header as the Calculation Level Payables option, you cannot enable this option, and therefore you can never enable the Includes Tax check box in the Distributions window.

See Also

Tax Names