1 Topic by waverider (edited by waverider 07/13/2010 10:25:10 am)

  • From: Australia
  • Registered: 07/09/2009
  • Posts: 54

Topic: Supplier Payment and GST

Hello,
I am using 2.2.8
I have set up GST with GL accounts for 'GST paid 'and 'GST received', and all my tax groups etc.  Each supplier has been set for GST to be applied. 

However, when I make a payment to a supplier either through: Purchases >Payments to Suppliers or: Banking and General Ledger> Payments, the 10% GST portion of the payment  is not being calculated and recorded in the appropriate GL account.

Where do I check to find why this is not being applied?

Thanks

  • Registered: 12/25/2007
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Re: Supplier Payment and GST

This is simply because payment is not subject to taxation. The taxes are collected or deducted on sales invoice issue or purchase invoice receive respectively.
Janusz

3 Reply by waverider (edited by waverider 07/13/2010 10:53:17 pm)

  • From: Australia
  • Registered: 07/09/2009
  • Posts: 54

Re: Supplier Payment and GST

itronics wrote:

This is simply because payment is not subject to taxation. The taxes are collected or deducted on sales invoice issue or purchase invoice receive respectively.
Janusz

Thanks Janusz,
So this means that even for cash items such as buying toothpicks for $2.20 ;-) I need to first create a purchase invoice and then make the payment?  Is there no 'single step' method for cash purchases?  I am not an accountant obviously :-)

At menu item 'Purchases' there is no 'Purchase Invoice' entry only 'Supplier Invoice'  Entering items into a Supplier Invoice doesn't appear to  calculate GST component either ( no amount showing under GST(10%) after an item is entered ) even though the Tax Group shows as GST ?

  • Registered: 12/25/2007
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Re: Supplier Payment and GST

You can also define Quick Entry of type bank payment and use it for direct registering payment to costs and tax accounts.

Regarding Supplier Invoice it does calculate taxes, however taxes are not displayed on screen for now. This issue is subject to change in 2.3RC1, I think.

Janusz

  • From: Australia
  • Registered: 07/09/2009
  • Posts: 54

Re: Supplier Payment and GST

itronics wrote:

You can also define Quick Entry of type bank payment and use it for direct registering payment to costs and tax accounts.

Regarding Supplier Invoice it does calculate taxes, however taxes are not displayed on screen for now. This issue is subject to change in 2.3RC1, I think.

Janusz

OK thanks - I'll have a look.

6 Reply by rbnzl (edited by rbnzl 11/08/2010 08:11:43 am)

  • rbnzl
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Re: Supplier Payment and GST

I am trialling 2.3RC3 and really like it except for one issue I am stuck on.  My original posting on this question must have been a silly one.  Here is it expressed another way.  Each month we have hundreds of purchases to enter, almost none of which are stocked items. We want the purchases to be debited against GL codes with GST apportioned to our GST code.   Investigating further it seems that our choices are:

1.  Load all of these potential purchases as 'Items' of type 'Service - then use Direct Invoices which will calculate the tax correctly
2.  Load them all into 'Quick entries' - then use 'Supplier Invoices' which will calculate the tax correctly
3.  Enter the items one at a time in 'Supplier Invoices' but manually calculate the tax (hopefully correctly!).

Obviously 1 or 2 can be done as they are encountered but it is some effort and many of these items of quick entries will not get used very often.  What would be really nice would be:

4.  Allocate an entry to a GL account as in 'Purchases>Supplier Invoices' and have the total tax calculated for these transactions as in 'Purchases>Direct Invoices'.

Is option 4 already available (and I am missing something) or not available?  If the latter, is it a feature that is likely to be added in the near future?

7 Reply by waverider (edited by waverider 11/09/2010 05:42:13 am)

  • From: Australia
  • Registered: 07/09/2009
  • Posts: 54

Re: Supplier Payment and GST

Gday rbnzl

rbnzl wrote:

3.  Enter the items one at a time in 'Supplier Invoices' but manually calculate the tax (hopefully correctly!).

As Janusz said it does actually calculate the GST - it just doesn't show up on the screen when you enter it. If you print the tax invoice after making the entry you will see that the GST component is printed correctly on the invoice. I was also hopeful that this would be fixed soon.

  • rbnzl
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Re: Supplier Payment and GST

Thanks waverider I really appreciate you taking the time to reply.  We have nearly given up in frustration which would be a pity as I am a big fan of opensource software - but I have an office manager to convince.  I must be missing something - when I view or print the invoice there is no tax (NZ GST) - yet there is if I enter the item via Direct Invoice.  Similarly, if i look at the invoice via Purchases>Payments to Suppliers.  Does this mean I haven't set something up correctly?

  • From: Australia
  • Registered: 07/09/2009
  • Posts: 54

Re: Supplier Payment and GST

rbnzl wrote:

Thanks waverider I really appreciate you taking the time to reply.  We have nearly given up in frustration which would be a pity as I am a big fan of opensource software - but I have an office manager to convince.  I must be missing something - when I view or print the invoice there is no tax (NZ GST) - yet there is if I enter the item via Direct Invoice.  Similarly, if i look at the invoice via Purchases>Payments to Suppliers.  Does this mean I haven't set something up correctly?

No - you are correct.  I hadn't revisited this for a while and have just got into the habit of using direct invoices as this resolved most of my problems.  Now that I look at it again I remember why I am doing it that way ;-( Once it is set up it is actually pretty easy.  It would seem to me that if you don't need to identify the individual items then setting up a quick entry might be the way to go.  If you do identify sold items, then at some time you are going to have to type them in somewhere - it might as well be an item description that you can use again.  Otherwise some generalised item to cover a group of things.  I guess it depends on your business and whether inventory is important. 

itronics wrote:

Regarding Supplier Invoice it does calculate taxes, however taxes are not displayed on screen for now. This issue is subject to change in 2.3RC1, I think.

Hey - where are you hiding Janusz.  Some info needed here :-)

  • Registered: 12/25/2007
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Re: Supplier Payment and GST

I have no reason to hide smile. I'm too lazy to check whether the tax display was added in 2.3RC1 or later, but please look into next.frontaccounting.eu demo - tax is displayed during purchase invoice entry in last 2.3RC3.
Regarding rbnzl question I'm not sure what is the problem you want to cure. If you have multiply service items which are posted on the same GL accounts (including taxes) and you do not want to entry multiply barely used service items, you can set one generic service item with editable description. This way you can use it for any services posted in the same way, while the descriptions on entered purchase invoice will inform you about real service registered.

Janusz

  • From: Australia
  • Registered: 07/09/2009
  • Posts: 54

Re: Supplier Payment and GST

itronics wrote:

I have no reason to hide smile. I'm too lazy to check whether the tax display was added in 2.3RC1 or later, but please look into next.frontaccounting.eu demo - tax is displayed during purchase invoice entry in last 2.3RC3.
Regarding rbnzl question I'm not sure what is the problem you want to cure. If you have multiply service items which are posted on the same GL accounts (including taxes) and you do not want to entry multiply barely used service items, you can set one generic service item with editable description. This way you can use it for any services posted in the same way, while the descriptions on entered purchase invoice will inform you about real service registered.

Janusz

Thanks Janusz - a quick and helpful response as usual :-)

  • rbnzl
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Re: Supplier Payment and GST

Thanks Janusz, but I am feeling pretty stupid as I still don't get it.  I am using 2.3RC3.

itronics wrote:

please look into next.frontaccounting.eu demo - tax is displayed during purchase invoice entry in last 2.3RC3.Janusz

I tried this and entered a supplier invoice from Lucky Luke, tag group = tax and the tax IvaMinimo (10%) was displayed at 0 and it should be 9.99 (or 99.99, can't remember).

itronics wrote:

Regarding rbnzl question I'm not sure what is the problem you want to cure. If you have multiply service items which are posted on the same GL accounts (including taxes) and you do not want to entry multiply barely used service items, you can set one generic service item with editable description. This way you can use it for any services posted in the same way, while the descriptions on entered purchase invoice will inform you about real service registered.

We have many items going to different GL accounts.  We also have many cost centres (>13).  It would seem that we have to set up an item for each GL account and each dimension.  A similar problem arises with quick entries.

  • Registered: 12/25/2007
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Re: Supplier Payment and GST

In previous FA versions tax was not displayed in purchase documents at all, now it is. I have no time to check what was changed on demo site (everybody has access to the demo settings), but believe me: if tax system in FA is set right, the tax is calculated and displayed in purchase documents correctly (or at least it works fine on my setup). Wiki explains how to set tax system in FA.

Janusz

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Re: Supplier Payment and GST

Still no joy - I have (1) reloaded the package to make absolutely sure I have the latest version.  I still have the same problem.  At http://imgur.com/EVP05.png there is a screenshot showing that (1) tax is correctly attributed on a quick entry and (2) unattributed on a GL account entry. 

To try and figure this out myself, I have had a look at the php script.  I think the relevant php script is ../accountsHF/purchasing/supplier_invoice.php - at what point in this script is the tax transaction generated for a GL entry?

  • Registered: 12/25/2007
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Re: Supplier Payment and GST

This is how the system works and it seems to be quite obvious: when you use items defined in inventory, every item has related tax group assigned, so the system knows how to calculate taxes. But If you entry arbitrary GL items you have to enter them correctly with apprioprate tax related GL lines  based on your accounting knowledge.

Take into account common situation when more than one tax is applicable depending on   goods/services category e.g. we have tax rate for luxury and normal goods. How the hell system can guess which one you want to use on GL items?

Therefore if you want to have taxes to be calculated fully automatically, do not use GL lines, but define in 'Items' special item for e.g. freight costs, and use it as additional item line in supplier invoice.

Janusz

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Re: Supplier Payment and GST

Thanks Janusz all is clear --there is no mapping of GL codes to tax types.  My mind was blinkered by the fact that we have a very simple tax system where everything except capital items and interest have a fixed rate of GST; no exemptions, no variable rates.  At the risk of asking another silly question, wouldn't a reasonable remedy be to have a drop-down pick list on the GL line for selecting tax with options linked to the tax types?  I think I have already explained our reluctance to get round this with items: many GL codes x many dimension.

  • Registered: 12/25/2007
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Re: Supplier Payment and GST

You are happy people with so simple tax system, but I have to say this is really rare case. We do not want to complicate invoice interface with additional tax selector, as anyway in most fiscal systems it will be unusable. You have at least two options: define items which will implement GL lines with right taxes, or enter tax line manually as separate item. Or customize  php scripts to have this made locally.

Janusz

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Re: Supplier Payment and GST

Janusz, thanks for your patience.  We seem to have converged on this one.  I had come to the conclusion that we have to customise our own php script.  When it comes to tax, simplicity is a virtue.  Hopefully our tax system stays this way.