Posting Tax to Journal (For Non-ERRM/Not Sales Tax Accounting)

For Non-ERRM/Not Sales Tax Accounting RFMS users, taxes can be posted to the Journal during the month end process: Accounting > File > General Ledger > General Ledger Function > Journal Close > Preliminary Journal Close

RFMS will prompt for the Tax Liability for the month.  This is where the SALES tax for the month being closed should be entered. 

Where will this post?

This sales tax posting during the month end close will DEBIT the Sales Tax Expense account and CREDIT the Sales Tax Liability Account.  When the payable is posted the following month, it will be coded to the Sales Tax Liability.  This will debit the liability and offset the entry posted during the close.  The expense account will not be offset, and therefore, the full amount for the period and fiscal year will be listed.

Should Use Tax be included?

Use tax is typically not included in the amount entered during the month end close. Sales tax is the only amount that posts with Gross Sales through job costing, and therefore it needs to be backed out.  Generally, a journal entry is created to accrue the use tax payments, so it is posted in the correct month.  As discussed with the sales tax above, the payable posted for the use tax will be coded to the liability to relieve that account.

What about any discounts received for paying early?

The full amount of the taxes due can be entered in the Accounts Payable invoice with the discount earned posting automatically to the Earned Discounts account code.