I have a sample item being sent to my company from abroad. It is an item to be used in a research project, and being a sample, the sending company is not requiring any payment to be done towards them. The item has a value, but no payment is requested. This means I have 0 liabilities towards suppliers from abroad.
However, I have fees for customs and taxes as the Customs office calculates the value of the good on their own terms meaning the value stated by the sender is not the one considered for taxation and customs fees, and also fees for shipping services related to that.
My initial approach was to enter the shipping invoice on its own, then deal with the other transactions, but I failed to figure out how to add taxes on prices estimated by the Customs office.
Then I was given a journal entry of how one would do this by hand and what i have is this:
accounting value of good - Db - (balance of all the below entries)
tax liability for shipping - Db - (amount from the shipping supplier invoice)
tax liabilities for customs - Db - (amount presented in the customs document)
supplier invoice - Cr (the gross value of the shipping invoice)
income from foreign goods - Cr (the declared value of the good by the foreign company)
I implemented this in a journal entry in manager.
I created 100% tax code for line 2 and 3.
Line 4 is basically a transaction on the supplier sub-ledger but I haven’t entered an invoice in the usual way.
It seems this produces the expected numbers in the tax summary report.
However, my question is, is this a good way to enter the transactions with Manager features in mind. Is there a better way to do this by exploiting some Manager feature better?
If you need clarification about what I’ve written also please respond.
Well yes. There is other way I could figure out how to add transactions to the tax liability account and to have them show in the tax summary report, so for the given values I just say these are 100% tax
@novica, I don’t see why journal entries are used or required at all. You did not make it clear who is sending the invoices for customs, taxes, and shipping. But, of course, every entity that sends an invoice needs a separate purchase invoice and/or payment.
Amounts that are all tax should be handled with 100% tax codes. (This situation is covered in the Guides.)
If I were you, I would consider creating the purchase invoice for the item at its taxable value. (I don’t know if that is what you meant by “accounting value.”) A regular tax code could be applied to this line. Then, I would enter a separate line, with negative unit price and no tax code, to reduce the amount owed to the supplier. This is effectively a line-item discount as described in this Guide: Enter a discount as a separate line item | Manager.
@Tut If I understand you correctly this is what you are suggesting:
This still leaves a balance on this invoice. But I am not paying this via an invoice anyway.
Maybe I should clarify.
The shipping invoice is sent by the shipping company.
However the taxes and customs fees are a separate document (which is not an invoice) and is given by the Customs office. So i need to somehow enter the values from that document without creating a liability from a purchase invoice.
I cannot read whatever language this is in. So I don’t know what it says, nor what kind of transaction it is. Therefore, most of the rest of your post is a mystery. Only an Edit screen would be useful.
As I already wrote, any invoice from a different entity must be entered separately.
That does not make sense. If the document requires payment from you, it is an invoice and can be entered as a purchase invoice, no matter what the tax authority calls it. Or you can just pay without a purchase invoice. As I wrote [emphasis added]:
@novica you’re on the right track, but you need to create separate purchase documents (“invoices”) in Manager, one for each entity you will pay (one for the shipping company, and another for the customs office).
