Modules»Accounts Receivable»Sales Tax Credit Through A/R
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Last modified on 1/28/2016 3:34 PM by User.


Sales Tax Credit Through A/R

In order for your sales tax reports to come out correct a sales tax credit should be completed through order entry with 2 documents; a taxable credit for all of the items and a non-taxable new invoice for all of the items.  See the document Sales Tax Credit - Using Order Entry & Editing.  If the sales tax reports are going to be manually corrected a credit memo through A/R may be done. 


NOTE: If an adjustment has anything to do with a return of inventory, the credit memo should be made in Order Processing (Module 6), Order Entry & Editing (Task 1). 

If an adjustment has anything to do with an over charge on an item, a credit memo can be made in Order Processing (Module 6), Order Entry & Editing (Task 1), to credit back the whole amount of the invoice of the over charge.  A new invoice may then be created for the correct amount.   


A/R adjustments are entered into Sales Entry and Editing (Task 1 in AR). This procedure will adjust both AR and the General Ledger after everything is posted and the month is closed.


Go to: 

  • Accounts Receivable (Module 2)
    • Sales Entry & Editing (Task 1)
      • Enter New Sales Record (Sub-task 1)
        • The important/necessary fields are listed below, in bold, with the number of characters in parenthesis.
        • First Screen:
          • 01. Invoice # :_____(6) Numeric. Assign an invoice number that is out of the range of the system generated invoice or CM numbers.                        
          • 02. Inv date:______(6) Enter a date in the current month
          • 03. Due date:
          • 04. Division#:__(2)                         
          • 05. Sale type:_(1)  Use transaction type of  "3" - credit memo. The system will prompt: “Check for duplicate credit memo or debit memo?” Answer Y              
          • 06. Customer # :______(6
          • 07. Salesman# :                       
          • 08. Sale amt: Enter key for zero.                    
          • 09. Other amt:  Enter key for zero.
          • 10. State tax: ________(8)   Enter the state sales tax amount if the original state sales tax was here instead of a zone tax. 
          • 11. Non-tax amt:_______(8) Enter key for zero.            
          • 12. Freight amt :
          • 15. Apply to:______(6)
            • If entering a credit memo:
              • IF the credit memo is to be applied to ONLY ONE invoice, enter the invoice # here. 
              • If the "credit" is to be applied to several invoices
                • Leave this field "0" and apply the newly created credit memo to the invoices through Cash Receipts Entry & Editing (Task 2)
                • Enter the new Credit Memo number being created in this step into field 11 and the invoices being written off on the second screen (Note: there will be a system generated debit memo and credit memo automatically created, which will be cleared off the customer’s account when the program:  “Clear Paid Inv.'s from A/R Open” is ran at month-end).
                • If the invoice number entered is not an open invoice, the following message appears:  Apply-to NOT in open file, credit will NOT show on account.
          • 16. St Tax flag_(1)  Enter a taxable tax flag from the pop up table.

          • 20. Department:__(2)

          • 21. Tax zone A :____(4) Type in the zone tax used on original invoice if applicable.   

          • 22.    zone A $ : Type in the amount of credit for zone tax A.

          • 23. Tax zone B :____(4) Type in the second zone tax on original invoice if applicable.

          • 24.    zone B $ :Type in the amount of credit for zone tax B.

          • 25. Tax zone C :____(4) Type in the third zone tax on original invoice I applicable.

          • 26.    zone C $ :Type in the amount of the credit for zone tax C.

          • 27. Tax state:

          • 28. P/O #: This is a 20 character alphanumeric notation.  Type an abbreviation for your records, example: “CREDIT SALES TAX”

        • Second Screen: The system won’t go to the second screen.

      • The Sub-task 4 (Print Sales Edit List) should be printed to verify the entries.

      • If everything is correct, use Sub-task 5 (Post Sales Records to A/R Files) to post.  The sales posting register should be saved the same as all other sales posting registers.  The total of the sales posting should go onto the A/R Daily balancing spreadsheet.