Banner Finance Taxation Supplement Training Workbook Release 8.3 – June 2009 Updated 4/30/2012
_______________________________________________________________________________________________

Ellucian

4 Country View Road
Malvern, Pennsylvania 19355
United States of America
(800) 522 - 4827

Customer Support Center website

http://connect.ellucian.com

Distribution Services e-mail address

distserv@ ellucian.com

Other services

In preparing and providing this publication, Ellucian is not rendering legal, accounting, or other similar professional services. Ellucian makes no claims that an institution's use of this publication or the software for which it is provided will insure compliance with applicable federal or state laws, rules, or regulations. Each organization should seek legal, accounting and other similar professional services from competent providers of the organization's own choosing.

Trademark

Banner®, Colleague®, PowerCAMPUS®, Luminis® and Datatel® are trademarks of Ellucian or its affiliates and are registered in the U.S. and other countries. Ellucian, Advance, Recruiter, and Open Digital Campus are trademarks of Ellucian or its affiliates. Other names may be trademarks of their respective owners.

Revision History Log

Publication Date	Summary
10/07/2008	New supplementary workbook to be used with the Purchasing and Procurement Training Workbook and the Accounts Payable Training Workbook for those institutions that are required to separately identify taxation paid by the institution as part of the purchasing and accounts payable processes.
6/30/2009	Added a lesson on displaying new person fields for internationalization.
4/30/2012	Updated with the Ellucian template.

Notice of rights

© 2012 Ellucian. All rights reserved.

Contains confidential and proprietary information of Ellucian and its subsidiaries. Use of these materials is limited to Ellucian licensees, and is subject to the terms and conditions of one or more written license agreements between Ellucian and the licensee in question.

Table of Contents

Introduction	4

Set Up	6

Displaying New Person Fields for Internationalization	7

Validation Tables and Maintenance Forms	9

Creating Tax Rate Codes	10

Maintaining Sales/Use Tax Groups	15

Maintaining Rebate Tax Groups	18

Taxation Processing	21

Defaulting Commodity Tax Group	23

Defaulting Ship To Address Tax Group	25

Defaulting Vendor Tax Information	27

Self Check	29

Answer Key for Self Check	30

Day-to-Day Operations	31

Process Introduction	32

Taxes on Purchase Orders	33

Taxes on Regular Invoices	39

Taxes on Direct Pay Invoices	44

Summary	49

Self Check	50

Answer Key for Self Check	51

Appendix	52

Forms Job Aid	52

Terminology	53

Introduction

Course goal

The goal of this workbook is to provide you with the knowledge and practice to perform taxation processing at your institution.

Note: This workbook is a supplementary workbook to the Purchasing and Procurement Training Workbook and the Accounts Payable Training Workbook for those institutions that are required to separately identify taxation paid by the institution as part of the purchasing and accounts payable processes. The Canadian taxation requirements are used throughout as the model to illustrate the functionality, which can then be similarly applied to meet the taxation requirements of any other country or State.

Course objectives

In this course you will learn how to:

identify and describe the validation tables and maintenance forms needed for the taxation functionality

create purchase orders using the taxation functionality

create invoices and credit memos using the taxation functionality

produce checks using the taxation functionality.

Intended audience

Staff members who are responsible for purchasing and accounts payable processes related to taxation.

Prerequisites

To complete this course, you should have:

completed the Education Practices computer-based training (CBT) tutorial Banner 8 Fundamentals, or have equivalent experience navigating in the Banner system

administrative rights to create and perform the necessary set up in Banner

completed training in the Banner Finance Procurement system

completed training in the Banner Finance Accounts Payable system.

Tax Processing

Once the tax rates are established, they can be set as system defaults and/or attached to Vendors to default in at the Requisition, PO or Invoice level. This then allows Banner to automatically calculate tax on these forms and, at any level, these Tax Codes can be overridden. There is also an override screen with invoice processing available to override the Tax amounts if the Vendor has calculated the Tax differently than Banner. This can sometimes happen if not all goods on an invoice are subject to the relevant tax rate.

Set Up

Section goal

The purpose of this section is to outline the set up process and detail the procedures to set up taxation processing on your Banner Finance system.

Objectives

In this section you will learn how to identify and describe the validation tables and maintenance forms needed for the taxation process. You will also need to decide if you want to display the new person fields for internationalization.

Displaying New Person Fields for Internationalization

Introduction

A major initiative of SunGard Higher Education is to make Banner more adaptable for use in different countries and with different languages. This ongoing effort is called internationalization (often abbreviated I18N).

As part of this initiative, Banner Finance 8.0 delivered several new fields in the database. These fields, however, were not visible on the user interface. With Banner Finance 8.3, these new fields can be displayed on forms and reports. This enhancement provides worldwide clients with a more robust, accurate, and efficient method of storing personal data.

New person fields

The following person fields are now available on several Banner Finance Forms and reports:

Field	Length	Description
Last Name Prefix	60 characters	Prefix that precedes a last name (for example, “Von” in the last name “Von Hintz”)
House Number	10 characters	Unique number assigned to each building on a street or in an area and used as part of the postal address in some countries (no validation)
Street Line 4	75 characters	Additional street address (no validation)
Telephone Country Code	4 characters	Code that designates the region and country of the telephone number (no validation)

Masked fields

Some users do not need these new fields on Banner forms. For this reason, Banner Finance 8.3 is being delivered with masking rules turned on for these new fields. This means the fields are not displayed on forms when you first upgrade to Banner Finance 8.3. If you want to display the new fields, you can do one of the following:

Run the gssmask.sql script, delivered with Banner General 8.2, to unmask the new fields. Refer to the Banner General 8.2 Release Guide for more details.

Use the Data Display Mask Rules Form (GORDMSK) to unmask the fields. You can unmask specific fields on specific forms. Refer to the Banner General Data Security Handbook for more details.

Masking rules apply only to name fields when they are displayed independently (that is, not concatenated). If fields are concatenated, the masking rules do not apply. It is assumed that the fields where data would normally be entered would be masked, preventing data entry. As a result, no values would be available for display on forms when the fields are concatenated.

Changed forms

Several forms can display the new person fields. Some forms display all new person fields; other forms display some of the new person fields. In general, the new person fields are displayed on forms as follows:

Last Name Prefix is displayed before the Last Name field.

House Number is displayed before the Street Line 1 field.

Street Line 4 is displayed after the Street Line 3 field. (If a form does not include Street Line 3, then Street Line 4 is not included on the form.)

Telephone Country Code is displayed before the Telephone Area Code field.

The following forms support the new person fields:

Ship To Address Maintenance (FTMSHIP)

Ship To Validation Form (FTVSHIP)

Tax Rate Code Maintenance Form (FTMTRAT)

Validation Tables and Maintenance Forms

Introduction

Before Banner can handle taxation processes, there are some validation tables and maintenance forms that need to be completed.

Forms needed

These setup forms and table validation views are used to set up the Accounts Payable module. Review these forms and set up as needed.

Form Description	Banner Name
General Setup
System Control Maintenance Form	FOASYSC
Procurement Maintenance Menu
Commodity Code Maintenance	FTMCOMM
Ship To Address Code Maintenance	FTMSHIP
Accounts Payable Table Maintenance Menu
Tax Rate Code Maintenance	FTMTRAT
Sales/Use Tax Group Maintenance	FTMTGRP
Rebate Maintenance	FTMREBT
Vendor Maintenance	FTMVEND

Creating Tax Rate Codes

Introduction

Use the Tax Rate Code Maintenance Form (FTMTRAT) to establish individual tax rates applicable to your institution. The tax rates are built for local, city, county, state, and national taxes.

Banner form

Steps

Follow these steps to build Canadian tax rates.

Access the Tax Rate Maintenance Form (FTMTRAT).

Enter GST in the Tax Rate Code field.

Enter Goods and Services Tax in the Description field.

Enter 7 in the Tax Rate field.

Enter 1 in the Priority field.

Note: Priority 1 taxes will be computed first. Priority 2 will be computed second and will include the tax computed for priority 1. You can have multiple priority 1 tax codes.

Enter the starting date of your chart in the Effective Date field.

If appropriate, check the Include Additional Charges checkbox to include any additional charges allocated to the commodity when computing the tax amount.

If appropriate, check the Include Discount checkbox to deduct discount amounts from the Approved Amount when computing the tax amount.

Enter V in the Pay Tax To field.

Note: V – Pay taxes to the vendor in all cases (this is the most common method for Canadian taxation processing). The vendor will submit any taxes collected on their invoices to the proper authorities.

Enter 67 in the Rebate Percent field.

Note: Canadian Universities receive back a portion of the taxes they pay.

Leave the Liability Accounting Distribution section blank and go to the Default Rebate Accounting Distribution.

Enter B in the Chart of Accounts field.

Enter 1110 in the Fund field.

Enter 1350 in the Receivable Account field.

Note: This default rate and accounting can be overridden for specific funds, organizations, accounts, and programs on the Rebate Maintenance Form (FTMREBT).

Click the Save icon.

Perform a Rollback function.

Enter PST in the Tax Rate Code field.

Enter Provincial Sales Tax in the Description field.

Enter 8 in the Tax Rate field.

Enter 1 in the Priority field.

Enter the starting date of your chart in the Effective Date field.

If appropriate, check the Include Additional Charges checkbox to include any additional charges allocated to the commodity when computing the tax amount.

If appropriate, check the Include Discount checkbox to deduct discount amounts from the Approved Amount when computing the tax amount.

Leave the Liability Accounting Distribution section blank and go to the Default Rebate Accounting Distribution.

Enter V in the Pay Tax To field.

Enter 67 in the Rebate Percent field.

Enter B in the Chart of Accounts field.

Enter 1110 in the Fund field.

Enter 1350 in the Receivable Account field.

Click the Save icon.

Perform a Rollback function.

Steps – Procedure 2

Follow these steps to build a California Sales Use Tax rate.

Enter CAL in the Tax Rate Code field.

Enter California Use Tax in the Description field.

Enter 7.375 in the Tax Rate field.

Enter 1 in the Priority field.

Enter the starting date of your chart in the Effective Date field.

If appropriate, check the Include Additional Charges checkbox to include any additional charges allocated to the commodity when computing the tax amount.

If appropriate, check the Include Discount checkbox to deduct discount amounts from the Approved Amount when computing the tax amount.

Click the Search icon in the Taxing Authority ID field, and find the State of California Taxing Authority vendor.

Note: Once the vendor is selected, the remaining fields will be filled in for you, if the Procurement address exists for the vendor. If you need to create a vendor or add address information for the vendor, use the Vendor Maintenance Form (FTMVEND).

Enter C in the Pay Tax To field.

Note: C – Pay taxes only to those vendors who are tax collectors. Vendors are marked as tax collectors (All, select or none) on the Vendor Maintenance Form (FTMVEND). An exercise to set up collectors in FTMVEND will be later in the workbook.

T – Pay only to the Taxing Authority. The university collects the taxes paid to the vendor on vendor’s invoice, and then pays the proper taxing authority.

Note: If value selected is either C or T, then a taxing authority vendor is required in the Taxing Authority ID field.

In the Liability and Accounting Distribution section, enter B in the Chart of Accounts field.

Enter 1110 in the Fund field.

Enter 2135 in the Liability Account field.

The Default Rebate Accounting Distribution Section is left bank.

Click the Save icon.

Click the Exit icon.

The Table below shows how to build State, City, and local taxes:

Tax Rate Code	CCT	MCT	NCT
Tax Rate Description	Charlotte City Tax	Mecklenburg County Tax	North Carolina State Tax
Tax Rate	0.25	3.0	4.0
Priority	1	1	1
Effective Date	01-JUL-2006	01-JUL-2006	01-JUL-2006
Include Additional Charges/Discounts	Y	Y	Y
Taxing Authority ID Required	Y	Y	Y
Pay Tax To	C	C	C
Build Liability Accounting Distribution	Y	Y	Y
Build Rebate Accounting Distribution	N	N	N

Maintaining Sales/Use Tax Groups

Introduction

Use the Sales/Use Tax Group Maintenance Form (FTMTGRP) to group sales/use tax groups together in order to calculate taxes on purchasing and payment documents. It is important to build a No-Tax tax group in case a commodity is tax exempt.

Banner form

Steps

Follow these steps to build a Canadian Tax Group.

Access the Sales/Use Tax Group Maintenance Form (FTMTGRP).

Enter OTG in the Tax Group Code field.

Enter Ontario Tax Group in the Tax Group Title field.

Enter B in the Chart of Accounts field.

Leave the Non Taxable checkbox blank.

Enter the start date of chart in the Effective Date field.

Perform a Next Block function.

Enter GST in the Tax Code field.

Note: The tax rate information will default in.

Perform a Next Record function to add additional tax rates.

Enter PST in the Tax Code field.

Click the Save icon.

Perform a Rollback function.

Steps – Procedure 2

Follow these steps to build a California Sales Use Tax Group.

Enter CSU in the Tax Group Code field.

Enter California Sales Use Group in the Tax Group Title field.

Enter B in the Chart of Accounts field.

Leave the Non Taxable checkbox blank.

Enter the start date of chart in the Effective Date field.

Perform a Next Block function.

Enter CAL in the Tax Code field.

Note: The tax rate information will default in.

Click the Save icon.

Perform a Rollback function.

Steps – Procedure 3

Follow these steps to build a No-Tax Group.

Enter NT in the Tax Group Code field.

Enter No Tax Group in the Tax Group Title field.

Enter B in the Chart of Accounts field.

Check the Non Taxable checkbox.

Enter the start date of chart in the Effective Date field.

Click the Save icon.

Click the Exit icon.

Maintaining Rebate Tax Groups

Introduction

Use the Rebate Maintenance Form (FTMREBT) to override the default rebate accounting distribution and percentage on the Tax Rate Code Maintenance Form (FTMTRAT). This is widely used by Canadian Universities because groups within the University may receive 80 or 100 percent rebate on their Goods and Services Tax.

Banner form

Steps

Follow these steps to complete an override of the GST tax rate.

Access the Rebate Maintenance Form (FTMREBT).

Enter GST in the Tax Rate Code field.

Perform a Next Block function.

Enter the start date of chart in the Effective Date field.

Note: the Tax Rate Code Description, Tax Rate Code Percent, and Rebate Accounting Distributions default in from the Tax Rate Code Maintenance Form (FTMTRAT).

Enter 80 in the Rebate Percent field.

Review the Rebate Accounting Distribution and make changes if appropriate.

Perform a Next Block function.

Enter 11601 in the ORGN From field. When an invoice or purchase order is charged to organization 11601, there will be a rebate of 80% on the 7% GST.

Note: If you enter a “from” Fund and not a “to” the system will assume the “from” and “to” are the same. The system will evaluate the fund first. If a transaction has a fund that falls within the distribution range, no other elements are considered. If in the distribution you leave the "“from'’ and “to” fund blank, and enter organizations, and then the system will rebate based on the organization criteria. The same is true with account and program. Also for each of the different rebate percentages established, you will need to setup a distribution. You can copy one distribution to another.

Click the Save icon.

Perform a Previous Block function.

Perform a Next Record function.

Enter the start date of chart in the Effective Date field.

Enter 100 in the Rebate Percent field.

Review the Rebate Accounting Distribution and make changes if appropriate.

Perform a Next Block function.

Enter 11105 in the ORGN From field.

Enter 11108 in the ORGN To field. Purchases from organizations 11105 to 11108 get all of the GST taxes back.

Click the Save icon.

Continue to build rebate overrides as necessary.

Click the Exit icon.

Taxation Processing

Introduction

Use the System Control Maintenance Form (FOASYSC) to enable tax processing.

Banner form

Steps

Follow these steps to complete the process.

Access the System Control Maintenance Form (FOASYSC).

Perform an Insert Record and Duplicate Record function to copy the existing control record.

Enter the current or a future date in the Effective Date field.

Select the Tax Processing Info option from the Options pop-down menu to navigate to the tax processing window.

Check the Tax Processing On checkbox to turn the tax processing on.

Select from the list in the Default Tax Group Code field the tax group code to be used as the institution’s default tax rate code.

Enter in the Tax Override Amount field the tolerance amount by which the user may manually override the system generated tax rate.

Note: This functionality is not widely in use but this field is required, so it is recommended to enter $1 to enable adjustments for rounding issues.

Enter in the Tax Override Percentage field the tolerance percentage by which the user may manually override the system generated tax rate.

Note: This functionality is not widely in use but this field is required, so it is recommended to enter 1% to enable adjustments for rounding issues.

Click the Save icon.

Click the Exit icon.

Note: To select an appropriate tax group, the system first looks to the commodity, then to the ship-to code, and finally to FOASYSC. In other words, the commodity tax rate takes precedence over anything else. If there is no tax specified for a commodity, the system will next look to the ship-to code (if the invoice resulted from a Purchase Order). If both commodity tax and ship-to tax are null, the default value will be used. The selected rate may be overridden by the user (unless the commodity record specifies no override allowed).

Defaulting Commodity Tax Group

Purpose

The Commodity Maintenance Form (FTMCOMM) is used to add, change, or delete Commodity codes and default account relationships. This form can be used to establish default tax information to be used with a commodity code.

Banner Form

Steps

Follow these steps to complete the process.

Access the Commodity Maintenance Form (FTMCOMM).

Double-click in the Commodity Code field and select 1111000000 (Desk, Office, Wood) as the commodity code to be set up for tax defaulting.

Perform a Next Block function.

Enter OTG in the Tax Group field.

Check the Override Taxes checkbox to enable a user (authorized in FOMPROF) to override the tax calculated, if required, when this commodity code is used. If this checkbox is unchecked, then the tax group defaulted to the commodity is the only tax group that can be used.

Click the Save icon.

Click the Exit icon.

Note: To select an appropriate tax group, the system first looks to the commodity, then to the ship-to code, and finally to FOASYSC. In other words, the commodity tax rate takes precedence over anything else. If there is no tax specified for a commodity, the system will next look to the ship-to code (if the invoice resulted from a Purchase Order). If both commodity tax and ship-to tax are null, the default value will be used. The selected rate may be overridden by the user (unless the commodity record specifies no override allowed).

Defaulting Ship To Address Tax Group

Purpose

The Ship To Address Maintenance Form (FTMSHIP) is used to enable the user to establish departmental or central routings for deliveries used on the Purchase Order Form. This form can be used also to establish default tax information to be used with a Ship To Address.

Banner Form

Steps

Follow these steps to complete the process.

Access the Ship To Address Maintenance Form (FTMSHIP).

Enter North in the Ship To Code field or select another code.

Perform a Next Block function.

Perform an Insert Record and Duplicate Record function to copy the selected Ship To Address record.

Enter the current or a future date in the Effective Date field.

Enter NCS in the Tax Group Code field or select another code.

Click the Save icon.

Click the Exit icon.

Notes: The tax group will default in FPAPURR from the FTMSHIP information and will add the tax calculated to the purchase amount. It can be overridden. For a direct pay invoice the tax group defaults from FOASYSC.

To select an appropriate tax group, the system first looks to the commodity, then to the ship-to code, and finally to FOASYSC. In other words, the commodity tax rate takes precedence over anything else. If there is no tax specified for a commodity, the system will next look to the ship-to code (if the invoice resulted from a Purchase Order). If both commodity tax and ship-to tax are null, the default value will be used. The selected rate may be overridden by the user (unless the commodity record specifies no override allowed).

Defaulting Vendor Tax Information

Purpose

The Vendor Maintenance Form (FTMVEND) is used to establish which vendors collect taxes when the Pay Tax to is a ‘C’ on tax code in the Tax Rate Code Maintenance Form (FTMTRAT). Vendors can collect all taxes, some taxes, or none.

Banner Form

Steps

Follow these steps to complete the process.

Access the Vendor Maintenance Form (FTMVEND).

Enter the vendor number in the Vendor field or click on the search icon to find a vendor on the Entity Name/ID Search Form (FTIIDEN).

Perform a Next Block Function

Change the vendor from Collects No Taxes to Collects Selected Taxes in the Collect Tax field.

Note: Collects No Taxes is the default value for all vendors. If Collects All Taxes were selected nothing further would need to be defined on FTMVEND.

Click on the Taxes Collected Tab.

Enter in GST in the Tax Code field.

Note: This means the vendor only collects the goods and services tax not the Provincial Sales Tax. Therefore, when the Ontario Tax group is used with this vendor, the GST is paid to the vendor and the PST tax liability is recorded at the university as defined on FTMTRAT.

Click OK after reading the pop up message.

Click the Save icon.

Click the Exit icon

Self Check

Directions

Use the information you have learned in this workbook to complete this self check activity.

Question 1

The Accounts Payable Table Maintenance Menu contains all the forms needed for taxation setup.

True or False

Question 2

Individual tax rates applicable to your organization are controlled on the Tax Rate Code Maintenance Form (FTMTRAT).

True or False

Question 3

What form is used to turn on taxation processing?

Answer Key for Self Check

Question 1

The Accounts Payable Table Maintenance Menu contains all the forms needed for taxation setup.

False

Question 2

Individual tax rates applicable to your organization are controlled on the Tax Rate Code Maintenance Form (FTMTRAT).

True

Question 3

What form is used to turn on taxation processing?

The System Control Maintenance Form (FOASYSC)

Day-to-Day Operations

Section goal

The purpose of this section is to explain the day-to-day or operational procedures to handle taxation processing at your institution.

Objectives

In this section you will learn how to

use purchase orders to calculate tax

use invoices to calculate tax

Process Introduction

About the process

Refer to the separate Workbooks for Purchasing and Procurement and Accounts Payable for the processes involved. This Workbook specifically only focuses on the taxation functionality in the Purchasing and Accounts Payable processes and is not in itself a process.

Taxes on Purchase Orders

Introduction

The Purchase Order Form (FPAPURR) is used to produce an external request for the purchase of goods or services from a vendor.

Banner form

Steps – Example 1

Follow these steps to create a purchase order using the Canadian tax group.

Access the Purchase Order Form (FPAPURR).

Leave the Purchase Order field blank.

Perform a Next Block function.

Enter the Order Date, Transaction Date, Delivery Date, and select a Buyer Code.

Select the Requestor/Delivery Information tab.

Enter the Requestor and enter North in the Ship to field, or select whichever Ship To code you set up with the tax group code.

Select the Vendor Information tab.

Enter V1 in the Vendor ID field.

Note that the Tax Group you set up for the Ship To code will default into the Tax Group field. The Tax Group can be changed here.

Select the Commodity/Accounting tab.

Enter 1111000000 in the Commodity field.

Select EA in the U/M field to enter a unit of measure.

Note: The Tax Group field defaults the tax group from the commodity code which overrides the default from the Vendor block, but the Tax Group can be changed here also if necessary.

Enter 10 in the Quantity field.

Enter 100 in the Unit Price field.

Note: The Tax amount field is automatically calculated based on the tax group.

Perform a Next Block function to navigate to the Accounting block.

Enter B in the COA field, if it did not default in.

Enter 1110 in the Fund field.

Enter 11001 in the Orgn field.

Enter 7510 in the Acct field.

Enter 60 in the Prog field and tab through all the amount fields.

Note: The amounts including the Tax amount are automatically calculated based on the commodity record.

Select the Balancing/Completion tab.

Review the Header, Commodity, and Accounting amounts to make sure they are in balance for all amounts.

If all amounts are in balance, click the Complete button

Make a note of your PO number.

Steps – Example 2

Follow these steps to create a California tax purchase order.

Leave the Purchase Order field blank.

Perform a Next Block function.

Enter the Order Date, Transaction Date, Delivery Date, and select a Buyer Code.

Select the Requestor/Delivery Information tab.

Enter the Requestor and enter North in the Ship to field, or select whichever Ship To code you set up with the tax group code.

Enter V2 in the Vendor ID field.

Note that the Tax Group you set up for the Ship To code will default into the Tax Group field. The Tax Group can be changed here.

Select the Commodity/Accounting tab.

Enter 1111000000 in the Commodity field.

Select EA in the U/M field to enter a unit of measure.

Enter CSU in the Tax Group field.

Enter 5 in the Quantity field.

Enter 200 in the Unit Price field.

Note: The Tax amount field is automatically calculated based on the tax group.

Perform a Next Block function to navigate to the Accounting block.

Enter B in the COA field, if it did not default in.

Enter 1110 in the Fund field.

Enter 11001 in the Orgn field.

Enter 7510 in the Acct field.

Enter 60 in the Prog field and tab through all the amount fields.

Note: The amounts including the Tax amount are automatically calculated based on the commodity record.

Select the Balancing/Completion tab.

Review the Header, Commodity, and Accounting amounts to make sure they are in balance for all amounts.

If all amounts are in balance, click the Complete button

Make a note of your PO number.

Steps – Example 3

Follow these steps to create a North Carolina tax purchase order.

Leave the Purchase Order field blank.

Perform a Next Block function.

Enter the Order Date, Transaction Date, Delivery Date, and select a Buyer Code.

Select the Requestor/Delivery Information tab.

Enter the Requestor and enter North in the Ship to field, or select whichever Ship To code you set up with the tax group code.

Enter V2 in the Vendor ID field.

Note that the Tax Group you set up for the Ship To code will default into the Tax Group field. The Tax Group can be changed here.

Select the Commodity/Accounting tab.

Enter 1111000000 in the Commodity field.

Select EA in the U/M field to enter a unit of measure.

Enter CSU in the Tax Group field.

Enter 5 in the Quantity field.

Enter 200 in the Unit Price field.

Note: The Tax amount field is automatically calculated based on the tax group.

Perform a Next Block function to navigate to the Accounting block.

Enter B in the COA field, if it did not default in.

Enter 1110 in the Fund field.

Enter 11001 in the Orgn field.

Enter 7510 in the Acct field.

Enter 60 in the Prog field and tab through all the amount fields.

Note: The amounts including the Tax amount are automatically calculated based on the commodity record.

Select the Balancing/Completion tab.

Review the Header, Commodity, and Accounting amounts to make sure they are in balance for all amounts.

If all amounts are in balance, click the Complete button

Make a note of your PO number.

Run posting (FGRACTG) if it is not running in sleep/wake mode.

Review your 3 Purchase Orders in FGIDOCR.

Note: Each purchase order created will post in total, including the tax amounts, to the FOAP/s entered in the accounting block.

Taxes on Regular Invoices

Introduction

The Invoice/Credit memo Form (FAAINVE) is used to pay for the purchase of goods or services from a vendor. In this exercise you will pay each of the 3 purchase orders created in the previous exercise.

Banner form

The Invoice/Credit Memo Form (FAAINVE) is used to create invoices and credit memos.

Steps – Example 1

Follow these steps to create a regular invoice for the Canadian purchase order.

Access the Invoice/Credit Memo Form (FAAINVE).

Leave the Document field blank.

Leave the Multiple checkbox unchecked.

Enter a “R” or select Regular from the Invoice Type pull-down list to display the purchase order field.

Enter your first purchase order number created in the previous exercise in the Purchase Order field.

Enter Y (Yes) in the Invoice All field.

Perform a Next Block function to access the Invoice/Credit Memo Header window.

Enter today’s date in the Payment Due field.

Enter A1 in the Bank Code field.

Perform a Next Block function to navigate to the Commodity block.

The Commodity, Description, U/M and amount fields are populated from the purchase order.

Enter 10 in the Accepted Quantity field.

Enter F in the Final Payment Indicator field.

Select Balancing/Completion from the Options menu to navigate to the Balancing Completion window.

Are all the appropriate levels balanced?

If yes, complete the invoice by clicking Complete.

Make a note of your Invoice number.

Run posting (FGRACTG) if it is not running in sleep/wake mode.

Review your invoice postings in FGIDOCR and drill down to FGQDOCP for each transaction.

Note: In this invoice we used the Canadian tax group which has a rebate of 67% of the tax. So you will see in FGIDOCR/FGQDOCP the entries liquidating the purchase order and then to debit the total expense to the department and credit the rebates for both GST and PST at the rate of 67% of the 7% and 8% taxes respectively. Because the vendor used in this example pays all taxes, the total amount (including tax) will be paid to the vendor.

Steps – Example 2

Follow these steps to create a regular invoice for the Californian purchase order.

Access the Invoice/Credit Memo Form (FAAINVE).

Leave the Document field blank.

Leave the Multiple checkbox unchecked.

Enter an “R” or select Regular from the Invoice Type pull-down list to display the purchase order field.

Enter your second purchase order number in the Purchase Order field.

Enter Y (Yes) in the Invoice All field.

Perform a Next Block function to access the Invoice/Credit Memo Header window.

Enter today’s date in the Payment Due field.

Enter A1 in the Bank Code field.

Perform a Next Block function to navigate to the Commodity block.

The Commodity, Description, U/M and amount fields are populated from the purchase order.

Change the Tax Group field to CSU.

Enter 5 in the Accepted Quantity field.

Enter F in the Final Payment Indicator field.

Select Balancing/Completion from the Options menu to navigate to the Balancing Completion window.

Are all the appropriate levels balanced?

If yes, complete the invoice by clicking Complete.

Make a note of your Invoice number.

Run posting (FGRACTG) if it is not running in sleep/wake mode.

Review your invoice postings in FGIDOCR and drill down to FGQDOCP for each transaction.

Note: In this invoice we used the Californian tax group for a vendor who does not collect taxes. So you will see in FGIDOCR/FGQDOCP the entries liquidating the purchase order and then to debit the total expense to the department and credit the tax liability account. Because the vendor used in this example pays no taxes, the net amount (excluding tax) will be paid to the vendor.

Steps – Example 3

Follow these steps to create a regular invoice for the North Carolina purchase order.

Access the Invoice/Credit Memo Form (FAAINVE).

Leave the Document field blank.

Leave the Multiple checkbox unchecked.

Enter an “R” or select Regular from the Invoice Type pull-down list to display the purchase order field.

Enter your third purchase order number in the Purchase Order field.

Enter Y (Yes) in the Invoice All field.

Perform a Next Block function to access the Invoice/Credit Memo Header window.

Enter today’s date in the Payment Due field.

Enter A1 in the Bank Code field.

Perform a Next Block function to navigate to the Commodity block.

The Commodity, Description, U/M and amount fields are populated from the purchase order.

The Tax Group field will default NCS as the commodity code was not used.

Enter 10 in the Accepted Quantity field.

Enter F in the Final Payment Indicator field.

Select Balancing/Completion from the Options menu to navigate to the Balancing Completion window.

Are all the appropriate levels balanced?

If yes, complete the invoice by clicking Complete.

Make a note of your Invoice number.

Run posting (FGRACTG) if it is not running in sleep/wake mode.

Review your invoice postings in FGIDOCR and drill down to FGQDOCP for each transaction.

Note: In this invoice we used the North Carolina tax group for a vendor who does collects selective taxes, in this case the NC State Sales tax. So you will see in FGIDOCR/FGQDOCP the entries liquidating the purchase order and then to debit the total expense to the department and credit the tax liability account for the Charlotte City tax (0.25%) and the Mecklenburg County tax (3%). Because the vendor used in this example pays the NC State tax, the net amount (excluding the City and County taxes, but including the State tax) will be paid to the vendor.

Taxes on Direct Pay Invoices

Banner form

The Invoice/Credit Memo Form (FAAINVE) is used to create invoices and credit memos.

Steps – Example 1

Follow these steps to create Direct Pay invoices for Canadian taxes.

Access the Invoice/Credit Memo Form (FAAINVE).

Leave the Document field blank and leave the default selection for Direct Pay invoice.

Enter V2 in the Vendor field.

Perform a Next Block function or select Invoice Header from the Options menu to navigate to the Invoice/Credit Memo Header window.

Enter today’s date in the Payment Due field.

Enter A1 in the Bank Code field.

Perform a Next Block function to navigate to the Commodity block.

Enter commodity information in the Description field.

Enter OTG in the Tax Group field.

Enter100 in the Approved field. The tax amount will be calculated automatically.

Perform a Next Block function to navigate to the Balancing Completion window.

Are all the appropriate levels balanced?

If yes, complete the invoice by clicking Complete.

Make a note of your Invoice number.

Run posting (FGRACTG) if it is not running in sleep/wake mode.

Review your invoice postings in FGIDOCR and drill down to FGQDOCP for each transaction.

Note: In this invoice we used the Canadian tax group for a vendor who does not collect taxes. However, the tax codes were created to always pay the tax to the vendor. So you will see in FGIDOCR/FGQDOCP the entries to debit the total expense to the department and the vendor will be paid the full amount (including tax).

Steps – Example 2

Follow these steps to create Direct Pay invoices for Californian taxes.

Access the Invoice/Credit Memo Form (FAAINVE).

Leave the Document field blank and leave the default selection for Direct Pay invoice.

Enter V2 in the Vendor field.

Perform a Next Block function or select Invoice Header from the Options menu to navigate to the Invoice/Credit Memo Header window.

Enter today’s date in the Payment Due field.

Enter A1 in the Bank Code field.

Perform a Next Block function to navigate to the Commodity block.

Enter commodity information in the Description field.

Enter CSU in the Tax Group field.

Enter100 in the Approved field. The tax amount will be calculated automatically.

Perform a Next Block function to navigate to the Balancing Completion window.

Are all the appropriate levels balanced?

If yes, complete the invoice by clicking Complete.

Make a note of your Invoice number.

Run posting (FGRACTG) if it is not running in sleep/wake mode.

Review your invoice postings in FGIDOCR and drill down to FGQDOCP for each transaction.

Note: In this invoice we used the Californian tax group for a vendor who does not collect taxes. The tax code was created to pay the tax to the vendor if the vendor collects tax. So you will see in FGIDOCR/FGQDOCP the entries to debit the total expense to the department and credit for the tax liability. The vendor will be paid the net amount (excluding tax).

Steps – Example 3

Follow these steps to create Direct Pay invoices using the reversal calculation function. In this example an invoice is received inclusive of tax and the vendor is not a collector of taxes.

Access the Invoice/Credit Memo Form (FAAINVE).

Leave the Document field blank and leave the default selection for Direct Pay invoice.

Enter V1 in the Vendor field.

Perform a Next Block function or select Invoice Header from the Options menu to navigate to the Invoice/Credit Memo Header window.

Enter today’s date in the Payment Due field.

Enter A1 in the Bank Code field.

Perform a Next Block function to navigate to the Commodity block.

Enter commodity information in the Description field.

Enter CAL in the Tax Group field.

Check the Reverse checkbox.

Enter100 in the Net amount field. The Tax and Approved amounts will be calculated automatically.

Perform a Next Block function to navigate to the Balancing Completion window.

Are all the appropriate levels balanced?

If yes, complete the invoice by clicking Complete.

Make a note of your Invoice number.

Run posting (FGRACTG) if it is not running in sleep/wake mode.

Review your invoice postings in FGIDOCR and drill down to FGQDOCP for each transaction.

Note: In this invoice we used the Californian tax group for a vendor who collects all taxes. However, the invoice amount included the taxes so the reverse calculation function was used. This functionality is not available for regular invoices.

Steps – Example 4

Follow these steps to create Direct Pay invoices using an invoice that has one commodity item that is taxed and one that is not.

Access the Invoice/Credit Memo Form (FAAINVE).

Leave the Document field blank and leave the default selection for Direct Pay invoice.

Enter V1 in the Vendor field.

Perform a Next Block function or select Invoice Header from the Options menu to navigate to the Invoice/Credit Memo Header window.

Enter today’s date in the Payment Due field.

Enter A1 in the Bank Code field.

Perform a Next Block function to navigate to the Commodity block.

Enter commodity information in the Description field.

Enter CAL in the Tax Group field.

Enter1000 in the Approved amount field. The Tax and Net amounts will be calculated automatically.

Perform a Next Record function to add a second commodity.

Enter commodity information in the Description field.

Enter NT in the Tax Group field.

Enter1000 in the Approved amount field. The Tax will be zero and the Net amount will be calculated automatically.

Perform a Next Block function to navigate to the Balancing Completion window.

Are all the appropriate levels balanced?

If yes, complete the invoice by clicking Complete.

Make a note of your Invoice number.

Run posting (FGRACTG) if it is not running in sleep/wake mode.

Review your invoice postings in FGIDOCR and drill down to FGQDOCP for each transaction.

Note: In this invoice we used the Californian tax group and the No Tax group for a vendor who collects all taxes. Tax was calculated for the first commodity and not for the second and the full amount was paid to the vendor.

Summary

Let’s review

As a result of completing this workbook, you have

set up the validation tables and maintenance forms needed for Canada, California and North Carolina taxation requirements

created regular invoice for the Canada, California and North Carolina tax scenarios

created direct pay invoices for vendors who collect and do not collect taxes

Self Check

Directions

Use the information you have learned in this workbook to complete this self check activity.

Question 1

Which form is used to establish different tax rates?

Question 2

Which form enables you to group multiple tax rates?

Question 3

What function would you use to pay an invoice that included taxes and you needed to deduct the tax liability from the vendor’s payment?

Answer Key for Self Check

Question 1

Which form is used to establish different tax rates?

The Tax Rate Code Form (FTMTRAT)

Question 2

Which form enables you to group multiple tax rates?

The Sales/Use Tax Group Maintenance Form (FTMTGRP)

Question 3

What function would you use to pay an invoice that included taxes and you needed to deduct the tax liability from the vendor’s payment?

The reverse calculation function in the Invoice/Credit Memo Form (FAAINVE).

Appendix

Forms Job Aid

Form	Full Name	Use this Form to...
FPAPURR	Purchase Order Form	enter information to create or modify purchase orders.
FAIINVE	Invoice/Credit Memo Query Form	query accounting, commodity, currency conversion, and tax information about a specified invoice.
FTMREBT	Rebate Maintenance	establish multiple rebate percentages for a tax rate and associate each rebate percentage with individual or combined FOAP (Fund, Organization, Account, and Program) attributes.
FTMTGRP	Sales/Use Tax Group Maintenance	add and maintain sales/use tax groups in order to calculate tax on purchasing and payment documents.
FTMTRAT	Tax Rate Code Maintenance	establish the individual tax rates applicable to your installation.
FTMVEND	Vendor Maintenance	add, change, or terminate vendor information.
FTVTGRP	Sales/Use Tax Group Validation	view existing tax group information defined to the system.
FTVTRAT	Tax Rate Code Validation	view existing tax rate information defined to the system.

Terminology

Canadian Goods and Services Tax (GST)

The goods and services tax (GST) is a tax that applies to the supply of most goods and services in Canada. Almost everyone has to pay GST/HST on purchases of taxable supplies of goods and services. Although the consumer pays the tax, institutions are generally responsible for collecting and remitting it to the government. Effective January 1, 2008, the Canadian GST rate was reduced from 6% to 5%.

Canadian Harmonized Sales Tax (HST)

Three provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador, referred to as the participating provinces) harmonized their provincial sales tax with the GST to create the harmonized sales tax (HST). The HST applies to the same base of taxable goods and services as the GST. Effective January 1, 2008, the Canadian HST rate was reduced from 14% to 13%.

Canadian Provincial Sales Tax (PST)

Separate Provincial Sales Taxes (PST) are collected in the provinces of British Columbia, Saskatchewan, Manitoba, Ontario, Quebec, and Prince Edward Island. Goods to which the tax is applied varies by province, as does the rate.