How to Process a Tax Only Invoice Payment
Occasionally you may get an invoice for payment of only the tax portion of a purchase. This sometimes happens when you purchase goods/services and the invoice for the taxes is sent separately from the invoice for the goods/services or there was an error on the original invoice.
For example, we bought goods/services for $100, paid the $100 to the vendor with no taxes using tax code E0, but are now receiving an invoice for the $13, all HST.
Example: Original Entry (*notice there is no tax rebate calculation).
To account for the original charge that has already been posted against your accounts when the original invoice was entered and to ensure the tax rebates are calculated correctly we need to process a 3 line entry into FIS:
- Credit $13 – Vendor Account (to pay vendor)
- Debit $113 tax code E1 – FIS Accounts (to calculate correct tax rebate)
- Credit $100 tax code E0 – FIS Accounts (to account for original invoice entry)
Example: Tax Only Payment Entry
Document Overview: (*notice the correct tax rebate calculation)
By entering a tax only invoice into FIS in this manner, we have accounted for the original payment and correctly captured the tax amounts and rebates.
- Reference Guide – Enter Invoice (FB60)
- Simulation – Enter Invoice (FB60)
- Reference Guide – Enter Invoice Using Alternative Payee Address (FB60)
- Simulation – Enter Invoice Using Alternative Payee Address (FB60)
- Reference Guide – Enter Invoice Using OTA Vendors (FB60)
- Simulation – Enter Invoice Using OTA Vendors (FB60)
- FAQ: HST