Oracle eBTax – reasons not to use Tax on GL Journals

Any transaction that has VAT or Tax on it should be going through the sub ledgers, such as AP and AR and not directly entered into the GL as a journal.

Below is a list of points that should be considered highlighting the issues that may be faced if the choice is to  still use journals to capture VAT.

  • Not possible to determine if it is a sale or purchase (credit) so cannot be used easily for any allocations or VAT returns
  • There are no determining factors on a journal for the tax engine to work so the tax is 100% manual
  • Tax has to be entered and calculated in a certain way or risk accidental posting to a VAT account but not reporting it causing reconciliation issues
  • Not linked to any recovery rates so all AP accounts have to be manually overwritten
  • No Security so can choose a tax rate from a regime that is not linked to the LE/OU and so whilst calculated would not be reported
  • importing journals from ADI can be difficult if the tax is required

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