VAT Tax (V) - Sales Order to Invoice

When you enter a sales order with VAT tax (tax explanation code V) and run Update Customer Sales (R42800), the system uses distribution AAIs to record the Cost of Goods (COG) Sold and Inventory accounts. Although the VAT amount appears on the sales update report, the system does not record it in the VAT Payables account until you post the invoice. You offset the VAT Payables account when you pay the tax authority.

This example displays the AAI that the system uses and the tables and accounts that the system updates when you run the specified program. The example is for a sales order in the amount of 1,000 USD with a 10 percent VAT tax rate.

Example: Sales Order to Invoice

Program	AAI*	Table	Accounts & Fields Updated	F0911 DR	F0911 CR
Update Customer Sales (R42800) Creates an invoice	. . . DM - 4230 DM - 4220 DM - 4240	F03B11 . F0911	Taxable (1,000) Tax (100) Gross (1,100) Store Sales COG Sold Inventory	. . . . 900	. . . 1,000 . 900
Post General Ledger (R09801) Posts the invoice to the general ledger	FIN - RTxxxx FIN - RC	F0911	VAT Payables AR Trade	. 1,100	100

* DM - AAI = Distribution/Manufacturing AAI (F4950); FIN - AAI = Financial AAI (F0012)