Use tax in Purchasing & Inventory

Fourth Customer Success Portal

• December 14, 2018 00:00

Question from @Selina Routh​ ,   ​Can someone please give us the best practice for entering use tax in Adaco when entering invoices?    Thanks.

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  David Fournier

  • March 31, 2023 15:44
  • Edited

  Good morning {@005D0000009gCUdIAM}​,

  Thank you for your query.

   

  We recommend that all Products that should incur Sales/Use Tax are marked as such with the applicable Rate Schedule, then should the Vendor not charge Tax on their Invoice, a negative/offset Rate for 'Accrued Use Tax' can be added which posts directly to the Balance Sheet 'Account' rather than flagged to 'Include Inventory' as outlined here:

  Adaco: Creating a Rate and Rate Schedule

   

  This practice will result in the Product Account being increased by the value of the expected Sales/Use Tax but the 'Accrued Use Tax' offsetting the same amount so that the net total payable to the Vendor balances to the Invoice value.

   

  As this is a common practice in several regions, we will be amending the following Article:

  Adaco: Entering Receiving Rates Rate Schedules

  Keep an eye out!

   

  Please let us know if you have further questions around this topic.

   

  Best

  David

  Fourth

  0
• 

  David Fournier

  • March 31, 2023 15:45
  • Edited

  Good morning {@005D0000009gCUdIAM}​,

  Thank you for your query.

   

  We recommend that all Products that should incur Sales/Use Tax are marked as such with the applicable Rate Schedule, then should the Vendor not charge Tax on their Invoice, a negative/offset Rate for 'Accrued Use Tax' can be added which posts directly to the Balance Sheet 'Account' rather than flagged to 'Include Inventory' as outlined here:

   

  Adaco: Creating a Rate and Rate Schedule

   

  This practice will result in the Product Account being increased by the value of the expected Sales/Use Tax but the 'Accrued Use Tax' offsetting the same amount so that the net total payable to the Vendor balances to the Invoice value.

   

  As this is a common practice in several regions, we will be amending the following Article:

  Adaco: Entering Receiving Rates Rate Schedules

  Keep an eye out!

   

  Please let us know if you have further questions around this topic.

   

  Best

  David

  Fourth

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