I’m testing what happens when I add the landed costs through my purchase receipt.
Our 12% sales tax is applies to the cost of what we buy as well as the shipping costs to bring it here.
For example, I buy $100 of goods and spend $25 on shipping, which I add to the “taxes and charges table.”
I need to pay 12% of sales tax on $125, so $15. But I’m only able to apply the 12% to the $100 and not to the total of $125.
Also, when I enter taxes and charges, do I apply the taxes to a “taxes paid” account and the shipping charges to a “stock shipping charges” account or to “expenses included in valuation”?
Lastly, what type of account is “stock shipping charges”? Is it cost of goods sold? expenses included in valuation? or something else?
Let’s say my purchase is in customs. I have to pay the sales tax on my purchase and the shipping costs before I can receive my purchase.
Do I create a separate purchase invoice for the tax and the shipping and then, once I receive my purchase, I add the tax and shipping costs to the purchase receipt?
Will that cause a double entry of costs?
Should I only enter the tax and shipping costs in the purchase receipt?
There are many questions here. Please try and ask questions separately.
Select the correct type. If you select “On net total” it will apply on the net total. If you select on “previous row total” it will apply including the previous row.
Regarding type of account for shipping charges, it depends if you include it in your item value or not.
If you make 2 invoices, it will apply twice. Use landed costs to add costs to valuation.
When I select “previous row total” the sales tax does not change either. Item costs 100, shipping 25, sales tax is 12% but instead of it equaling $15 it still only equals $12.
Please allow me to verify. If I include a charge in the value of the item then I add it to “Expenses included in valuation” and if I don’t then I add it to another account. Okay, but why, in your default account chart, is there a “shipping account” under direct expenses?
Please allow me to verify. If I include DHL charges in the value of an item then I don’t input the DHL invoice separately at any point. I only input the invoice total through the landed cost feature. I might add a field for the supplier tracking number.
I pay the supplier first. When it’s in customs then I pay the tax. I add the tax when I make the purchase receipt but it does not appear in my general ledger. Since tax does not go into the valuation, do I make a separate journal entry for the tax payment?
Considering your requirement, following is how you should setup taxes and charges table in your Purchase Receipt.
Row 1: Shipping Charges, Type - Actual, Consider for Valuation
Row 2: Account - VAT, Type - On Previous Row Total, Reference Row - 1, Consider For - “Total”.
Shipping Charges will be booked only in the valuation of item, but no expense will be booked for it. You should create separate Purchase Invoice for booking shipping charges.
Amount of VAT will be booked when you create Purchase Invoice against Purchase Receipt.
We generate an invoice after we make the purchase order because we have to pay before we receive the product. Therefore I cannot generate a purchase invoice against the purchase receipt.
Should I make a separate purchase invoice for the VAT payment?
Sometimes we make the purchase invoice first and the purchase receipt second. In this case, how can I make sure the VAT gets booked?
Also, when I select “On Previous Row Total” type and reference row 1, it still calculates the VAT tax based on the item total and does not include the shipping charge.
purchase order → pay foreign supplier (no VAT) → when items reach customs we pay the government directly for the VAT → receive items and apply shipping charges to valuation.
I think paying the supplier with an advanced payment will solve this issue because it will allow me to generate the invoice once I know how much VAT we owe.
It is possible to record an advanced payment against a sales order? So far I haven’t been able to.
Hi Sofia, I know our friends in Mumbair do not like my "work-around"and it is also no good if you process many purchases.
What I do for chains that do not fit Erpnext standard workflow easily is that i do not submit them. Make a PO, save, and finalize the whole process (PO,GRM,BILL,JV) once I have all data. I recognize "special cases"because they are “not submitted” . Of course your accounts are not fully uptodate with this approach but for me it works fine.
I think this is a common scenario in some countries (for instance Spain), we must apply the taxes to the products and also to the shipping (together), in the sale sales order / invoice. The problem is that by default ERPNext applies the taxes to the base net, but separates the Shipping cost from the base net.
I can’t figure out how to do this: shipping charge must be in the previous row. I Can’t find the doctype que do this. I have checked Sales Order, but also Sales Taxes and Charges.
When I add the Shipping is goes to the last line, so I can’t choose this line number in my taxes configuration when using total amount.
Any idea how to solve this problem? Could we make the shipping as part of the base net?