Taxes and Cash Discounts

SAP AG

SAP AG

TAMM30 4.0B

7-1

Taxes and Cash Discounts: Objectives

At the conclusion of this unit, you will know:
How to enter tax information for an invoice
How to enter cash discount information for

an invoice
That invoices can be posted as either net

or gross amounts
How account movements differ when

amounts are posted net or gross

SAP AG

SAP AG

TAMM30 4.0B

7-2

Sales Tax

Vendor

Material value
+ Input tax

Company

Material value
+ Output tax

A
A A

Customer

Tax payable

Tax authorities
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SAP AG

The value added to goods results from the difference between the purchase price and the sales price. An
example of value-added tax, more commonly referred to in the USA as sales tax, would be the amount
the State adds on top of the sales price.
Sales tax can be divided into input tax and output tax.
The difference between output tax and input tax is the tax payable, which must be paid to the tax
authorities.

SAP AG

TAMM30 4.0B

7-3

Entering Tax Data

Invoice
Material A 1000
Material B 2000
Material C 4000
5% Tax
10% Tax

150
400
7550

Item screen
Item screen
Item screen
Amount
1000
Tax code.
5I

Purchase order item

G/L account
Last used tax code

Vendor screen
Amount
7550
Tax amount
400
Tax amount
150
Calculate tax

Customizing

Tax code
Tax code

1I
5I

Tax data
Amount
400
150

Tax
code
1I
5I

Tax base
amount
4000
3000
R

SAP AG

A tax code is defined for each tax rate in Customizing for Financial Accounting.
In conventional Invoice Verification, on the vendor screen you enter the tax amounts indicated in the
invoice and also the tax codes defined for the tax rates. If the tax amounts are not apparent in the
invoices, you flag Calculate tax and the system then automatically calculates the tax amounts.
Each tax-relevant item is allocated a tax code. The system reads the relevant tax code for each item
from the purchase order or from the account to be posted to. If a tax code cannot be determined for an
item, the system uses the one that was last entered.
You can change the tax code for an item on the item detail screen.
The system calculates the tax base for each tax code from the amounts and tax codes of the individual
items.
The system verifies the tax data when you simulate or post an invoice. You can make corrections and
changes on the Tax data screen.

SAP AG

TAMM30 4.0B

7-4

Entering Tax Data

Invoice

5% Tax
10% Tax

Customizing

Initial screen

Material A 1000
Material B 2000
Material C 4000

Amount
7550
Tax amount
400
Tax amount
150
Calculate tax

150
400
7550

Tax code 1I
Tax code 5I

Item list

Tax data
Tax
amount
400
150

Tax
code
1I
5I

Base
amount
4000
3000

Material Amount
A Steuerdaten
1000
B
2000
C
4000

Tax code
5I
5I
1I

Purchase order item

G/L account
Last used tax code
R

SAP AG

A tax code is defined for each tax rate in Customizing for Financial Accounting.
In Logistics Invoice Verification, on the initial screen you enter the tax amounts indicated in the invoice
and also the tax codes defined for the tax rates. If the tax amounts are not apparent in the invoices, you
flag Calculate tax and the system then automatically calculates the tax amounts.
Each tax-relevant item is allocated a tax code. The system reads the relevant tax code for each item
from the purchase order or from the account to be posted to. If a tax code cannot be determined for an
item, the system uses the one that was last entered.
The item tax codes are displayed in the item list and can be changed there if required.
The system calculates the tax base for each tax code from the amounts and tax codes of the individual
items.
The system verifies the tax data when you simulate or post an invoice. You can make corrections and
changes on the Tax data screen.

SAP AG

TAMM30 4.0B

7-5

Terms of Payment
Vendor Master Record
Purchasing data
CONDITIONS
Terms of payment ___

Purchase order
Purchase order header
TERMS OF DELIVERY AND PAYMENT
Terms of payment ___
Payment in
_days _%
Payment in
_days _%
Payment in
_days net

Invoice
Vendor screen
PAYMENT CONTROL
Terms of payment ___

_ days _%
_ days _%
_ days net

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The system displays a key for terms of payment, for example:

ZB01 within 14 days: 5 % cash discount
within 21 days: 3% cash discount
within 40 days: no deduction
You can enter payment terms in the vendor master record and in the purchase order.
When you create an invoice referencing a purchase order, the system suggests the payment terms from
the purchase order; if none are available, those from the vendor master record are suggested. These
default values can be changed.
You can enter terms of payment or a fixed cash discount amount in the Invoice Verification component.
In conventional Invoice Verification, you can also enter a cash discount base amount, or exclude
individual items from cash discount.
Installment conditions can only be processed in Logistics Invoice Verification. If you enter an
installment condition in Invoice Verification, a separate vendor line is created for each installment when
the accounting document is posted.

SAP AG

TAMM30 4.0B

7-6

Posting Gross / Net

Posting Gross
Invoice
total
% discount

100
3

Post
Post invoice
invoice

Material/Costs

Payment
Payment program
program

Non-operating result

Post
Post invoice
invoice

Material/Costs

Posting Net
Invoice
total
% discount

100
3

SAP AG

There are two ways of posting the cash discount amount:

Gross
When you post the gross amount of an invoice, the system will ignore the cash discount amount when
you are entering the invoice data; the cash discount amount is posted to a cash discount account when
payment is made. The cash discount amount is therefore not credited to the stock or cost account.
Net
When you post an incoming invoice, the cash discount amount is posted from a cash discount clearing
account to the stock or cost account. The cash discount clearing account is cleared when payment is
made.
Whether an invoice is posted gross or net depends on the document type.
You define the document types in Customizing for Invoice Verification. For each document type, you
indicate whether postings should be made gross or net. You also set the type of document that is
suggested when an invoice is entered.

SAP AG

TAMM30 4.0B

7-7

Account Movements: Gross Posting

Purchase order: 5 pcs @ 20.00 UNI/pc.
Goods receipt for this purchase order: 5 pcs
Invoice: 5 pcs @ 20.00 UNI/pc.
= 100.00 UNI
10% tax
= 10.00 UNI
= 110.00 UNI
less 5% cash discount
=
5.50 UNI
104.50 UNI

Goods receipt

Stock account
GR/IR account
Vendor account
Input tax
Bank
Non-operating result

100 +
100 -

Invoice

100 +
110 10 -

FI Payment

110
+
0.50 104.50 5
-

SAP AG

The system ignores the cash discount amount when posting the invoice.
The cash discount amount is posted when payment is made:
The cash discount amount for the net invoice value is posted as a non-operating result.
A cash discount difference is created as a result of the input tax. The system therefore corrects the
input tax posted, so that the tax amount is the tax on the net value of the invoice.

SAP AG

TAMM30 4.0B

7-8

Account Movements: Net Posting

Purchase order: 5 pcs @ 20.00 UNI/pc.
Goods receipt for this purchase order: 5 pcs
Invoice: 5 pcs @ 20.00 UNI/pc.
= 100.00 UNI
10% tax
= 10.00 UNI
= 110.00 UNI
less 5% cash discount =
5.50 UNI
104.50 UNI

Goods receipt
Stock account
GR/IR account
Vendor account
Input tax
Bank
Cash discount
clearing account

100 +
100 -

Invoice
5100 +
110 10 +
5+

FI Payment

115
+
0.50 104.50 5

SAP AG

The cash discount amount is already taken into account when the invoice is posted.
The cash discount amount is posted to a cash discount clearing account; this is cleared when payment is
made.
The offsetting entry for the posting to the cash discount clearing account is made to the stock account,
except in the following cases:
If the material is valuated at standard price, the price is posted to a price difference account.
If the material is valuated at moving average price and there is insufficient stock coverage, only the
amount for which stock coverage is available is posted to the stock account. The remainder is posted
to a price difference account.

SAP AG

TAMM30 4.0B

7-9

Taxes and Cash Discounts: Summary

In conventional Invoice Verification, you enter the

tax and cash discount data on the vendor screen. In

Logistics Invoice Verification, you enter this data
on the initial screen.
You can enter additional tax data on the tax data

screen. The system calculates the tax base

automatically.
The system issues a warning if the tax data is

inconsistent. The system can calculate the tax for

you if the tax amounts are not specified in the
invoice.
When gross amounts are posted, the cash discount

is not taken into account. When net amounts are

posted, the cash discount is
posted to a clearing account.
R

SAP AG

SAP AG

TAMM30 4.0B

7-10