Several of our clients have recently asked us how to process an invoice for a vendor in which the company needs to calculate and record a use tax. In most instances, a use tax is required when you purchase items from a vendor for resell; however, in this example, let’s say you will be consuming the item internally rather than reselling it. To process a use tax invoice in the Accounts Payable module of Sage 300 ERP (formerly Sage Accpac), follow the steps outlined below:
- Before you begin creating the invoice, you need to ensure that the vendor has been assigned to a Tax Group (which has already been set up to calculate use tax). For more information on this, read our tip on how to set up a use tax in Sage 300 ERP Tax Services.
- Click on Accounts Payable – A/P Vendors – Vendors.
- Enter the vendor number, and click on the Invoicing tab.
- Verify the Tax Group and Tax Class, then click “Save”.
Now it’s time to enter the vendor’s invoice:
- Click on Accounts Payable – A/P Transactions – Invoice Batch List.
- Click the New button, and enter the invoice.
- Enter the correct G/L expense account in the Distribution.
- Click on the Account/Tax button. This will prompt Sage 300 ERP to calculate the use tax on this line distribution.
- Change the Detail Tax Class from 1 to 2 so the tax will be calculated based upon the set up in Tax Services.
- Click “Close”.
The next (and final) step of the process is to account for the calculated Use Tax. We recommend creating another distribution line in the invoice entry and debiting the same account as the line item being taxed. This will ensure that the calculated Use Tax follows the original expense causing the calculation. When the Undistributed Amount equals 0, click the “Add” button and continue to enter all of the other invoices.
For more useful Sage 300 ERP tips, stay tuned to our blog. We will continue posting software tips, tricks, and processes to help you get the most out of your software investment.