I’m a complete novice to to ERPNext (and accounting in general) and I’m getting really confused when creating my sales invoice and payment entry. I’m pretty sure I need to have the tax defined on both documents, but that produces 2x the liability.
Here’s how my Chart of Accounts looks before I do anything:
I then create a sales invoice with a cost of 320 SEK and 25% tax for a total of 400 SEK:
Now the Chart of Accounts again:
Everything’s fine up to this point from what I can tell. Let me now create the Payment Entry:
Sidenote: Here’s the one and only row I have under Advance Taxes and Charges:
Let’s now look at the Chart of Accounts and the General Ledger:
In the screenshot above we see; 80 SEK have been added to the Debtors account under Accounts Receivable and 80 SEK have been added to the VAT account under Duties and Taxes. Why is this happening? Should I not specify the tax on the Payment Entry? Am I wrong in thinking of the Payment Entry as a receipt I can send to the customer?
When I create a Payment Entry without the tax, then the Chart of Accounts and General Ledger look fine, but I’m not sure if it’s the way it is supposed to be:
All attempt to help to try to clarify this is greatly appreciated!