Setup Sales Tax Accounting - System Option

In a Non-ERRM Environment, RFMS natively includes sales taxes in the gross sales number and is posted to the general ledger standard account identified as Sales.

A system option is available to have Sales Tax posted directly to Sales Tax Payable. This option is called Setup Sales Tax Accounting (x>Utilities>System Options>Order Entry>Order Entry  Category Configuration)

If Sales Tax Accounting is turned on, sales will be posted to the general ledger after removing sales taxes during the month end close (Gross Sales - Sales Tax).  The sales tax amount will be posted to the standard account code identified as Sales Tax Payable.

• The starting date for this change will be the first day of the next month greater than the value of latest Delivery Date. This change will be permanent.
• Use tax is not posted automatically in any RFMS environment.
• If Sales Tax Accounting is turned on, the Sales Tax Liability entry during the Journal close is removed.

Before/After illustrations below for the same sales/tax figures:

Job Cost Analysis reflecting sales totals for Month:

TOTAL DELIVERED SALES = $109,500
TOTAL SALES TAX                      9,500
TOTAL NET SALES                  100,000

STANDARD NON-ERRM requires end user to enter sales tax during Journal Close:

The TOTAL Delivered amount posts to Sales while the sales tax receives posts to Sales Tax Expense (D) and Sales Tax Liability (C):

SALES TAX ACCOUNTING via Non-ERRM auto-posts the NET Delivered amount to Sales and the sales tax posts to Sales Tax Liability (C)