Tax overrides for purchase documents
Sparkrock 365 automatically calculates taxes on expense claims and payment requests as well as when these documents are converted to purchase invoices and purchase credit memos. If necessary, you can set up Sparkrock 365 so that different tax amounts can be specified that override the default tax amounts. For more information about how to set up tax overrides, see Set up tax overrides for purchase documents.
Expense claim tax overrides
In mySparkrock, tax override amounts are specified per expense.
In Sparkrock 365, you override the tax amounts on the respective line. For example, to override a tax amount in Canada, you specify a value in the GST/HST Override and PST Override fields on the respective line of the expense claim.
Price calculations that include or exclude tax
The tax override calculation for expense claims or payment requests is dependent on whether the price calculations include or exclude tax.
The following table describes the supported unit amount types per document type.
| Document Type | Supported Unit Amount Type |
|---|---|
| Payment requests | Excludes Tax or Includes Tax. Only one of these options is supported per expense type. |
| Expense claims | Includes Tax |
On payment requests, the unit amount type is specified on individual expense types on the Expense Type Card page and is determined by the value in the Unit Amount Type field. A payment request can have a mixed mode of lines that are calculated based on the unit amount or the gross unit amount. The gross unit amount is the unit amount including tax.
Unit cost when including tax
When the one or more lines on an expense claim or payment request are using the Gross Direct Unit Cost or in other words, the unit cost including tax, the following calculation is used to determine the value for Unit Cost:
If the Quantity is not equal to 0:
Unit Cost = [Gross Direct Unit Cost] - (([PST Expense] + [PST Recoverable] + [GST Expense] + [GST Recoverable]) / Quantity)
The Unit Cost value that is calculated is automatically populated on the purchase invoice or purchase credit memo lines.
Total including tax input on purchase invoices and purchase credit memos
When a payment request or expense claim is converted to a purchase invoice or purchase credit memo, the Total Incl. Tax Input field is automatically populated as follows:
For expense claims, the value is the total of the claim.
For payment requests, the value is 0.00.
Values transferred for lines that do not have a tax override
When a payment request or expense claim is converted to a purchase invoice or a purchase credit memo and the lines do not have a tax override, the values are transferred as follows:
The value for Unit Cost is automatically populated with the value for Unit Cost on the payment request or expense claim line.
The value for Tax Area Code is automatically populated with the value for Tax Area Code on the payment request or expense claim line.
The value for Tax Group Code is automatically populated with the respective setting on the expense type.
Values transferred for lines that do have a tax override
When a payment request or expense claim is converted to a purchase invoice or a purchase credit memo and the lines have a tax override, the values are transferred as follows:
The value for Unit Cost includes the prorated portion of the tax expense, for example, in Canada, the value can be GST, PST, or both.
The value for Tax Area Code is automatically populated with the value for Tax Area Code on the payment request or expense claim line.
The value for Tax Group Code is automatically populated with the value that appears on the Purchases & Payables Setup page, in Override Tax Group Code.
One or more lines are created for the recoverable portion of the tax.
The new lines have the following values automatically populated:
- The value for Type is G/L Account and the value for No. is determined based on the general ledger account numbers that are associated with the override jurisdiction code fields on the Tax Area page, on the Purchase Requisition FastTab.
- The value for Tax Group Code is automatically populated with the value that appears on the Purchases & Payables Setup page, in Override Tax Group Code.
- The value for Tax Area Code is automatically populated with the value for Tax Area Code that appears on the General FastTab of the purchase invoice or purchase credit memo.
Tax override considerations and best practices for purchase invoices or purchase credit memos
The following list describes considerations and best practices for purchase invoices or purchase credit memos that are created from a payment request or expense claim, and where the payment request or expense claim has one or more lines with tax overrides:
Do not specify tax information in the tax reconciliation fields on the General FastTab.
If required, you can specify a value in Total Incl. Tax Input.
If required, to adjust taxes, update the Direct Unit Cost Excl. Tax on the lines with the recoverable tax.
Only reconcile the Total Incl. Tax Input and Total Incl. Tax (CAD) fields.
You are not expected to change the values for Tax Area Code or Tax Group Code on a line.
Updating the tax information on the General FastTab overrides the tax calculations on the one or more lines. When tax overrides are in place, do not perform this action.
Purchase invoice and purchase credit memo direct unit cost calculations for tax overrides
When purchase invoices or purchase credit memos are created from a payment request or expense claim, and the payment request or expense claim has one or more lines with tax overrides, the direct unit cost includes the tax expense and is calculated as follows in Canada:
If the Quantity on the purchase line is > 0:
Direct unit cost = Purchase line.[Unit Cost] + (([PST Expense] + [GST Expense]) / Quantity)
If the Quantity on the purchase line is < 0:
Direct unit cost = Purchase line.[Unit Cost] + (([PST Expense] + [GST Expense]) / Quantity * -1)
In this case, the quantity on the line of the expense claim or payment request is negative and the taxes are negative. The quantity and taxes must be added to the direct unit cost, not subtracted from the direct unit cost.
Note
Note:
Purchase line in these calculations is the purchase invoice or purchase credit memo line.
Related information
Set up tax overrides for purchase documents
Reporting Goods and Services Tax (GST) and Harmonized Sales Tax (HST) in Canada
Reporting sales tax in the US
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