5 Replies Latest reply on Jan 4, 2011 11:26 AM by Jerry VanScoter

    Processing taxes on invoices

    Srini Varadarajan Master

      Would like to understand how Use Taxes are handled using Ariba Invoice when the vendor drop ships items to multiple locations.

       

      We use Ariba Invoicing for all our enabled suppliers. We route the invoice to Tax dept if there's no tax mentioned. The tax department then accrues appropriate Use tax against the transaction. The tax team relies on PO / Invoice information including ship to locations to make the appropriate tax call. This process gets delayed when the supplier drop ships items to multiple locations. Looking for an easier way.

        • Re: Processing taxes on invoices
          Alice Hillary Journeyman

          Srini,

           

          We are working on a solution to this too.  Leased items in certain states require a Use tax.  We are testing a solution to add that tax from the supplier side, just as they do sales tax and shipping costs.  You would probably need them to apply the tax at a line item level if there are multiple ship tos on the order.

           

          I am curious if anyone has experience with IDA and tax accruals related to it.  We had a manual process prior to P2P that is not easily solutioned using reports.  Does anyone have experience or solution to handling the IDA in NYC?

           

          Regards,

           

          Alice H.

          1 of 1 people found this helpful
            • Re: Processing taxes on invoices
              Srini Varadarajan Master

              Hi Alice

               

              Do you use Ariba for Invoicing too? Our tax tables are maintained in the ERP. All suppliers enter invoices through ASN/ Ariba Invoice and send tax at  Line Level taxes (with a few exceptions).

               

              If there's not tax we route the invoice to the Use Tax team. The Use Tax team manually determines whether tax is applicable. If applicable, they tag the transaction with appropriate tax codes. This information is sent along with the voucher data to the ERP that calculates the necessary Use Tax. We are looking to streamline this process with a tax software but it works for now.

               

              However for multiple drop ship items against a single line, our process fails. Dont know if we can force the supplies to send us one invoice per shipment.

                • Re: Processing taxes on invoices
                  Alice Hillary Journeyman

                  Srini,

                  We do use the Ariba Network for invoicing.  Not all invoices have applicable tax.  Sales tax is added by the supplier at the time of invoice.  The Use/Property tax is applicable to lease items.  We have found a way to have that added as a separate item that can be added by the supplier at the time of invoicing.  Sales tax is handled by the ERP after invoicing.  We are working on a solution for the Use/Property tax as this requires more handling on our side in the ERP.

                   

                  Regards,

                  Alice

              • Re: Processing taxes on invoices
                Jeffrey LeStyne Novice

                Is there any way to view the tax rates that are already in place in Ariba? I use AIP and I cannot locate where to go to see what rates are being used. Can this be automatically updated to reflect every state's sales tax? My company usually orders stuff from various vendors to be shipped to various places across the U.S and we end up having to go through a lot of Tax Variance Exceptions. Looking for a way to alleviate this burden and use Ariba to its maximum potential from an AP standpoint.

                • Re: Processing taxes on invoices
                  Jerry VanScoter Expert

                  I would encourage you all to go to Joe Fox's discussion to provide your feedback on integration of tax software with P2P invoicing.  That would be the most elegant solution to all these issues.  If enough people express interest Ariba may make this available.  Maybe we can even get a group discount?  Ariba?

                   

                  Here's the discussion title:

                   

                  Tax Software Integration into Ariba Network and On-Demand?