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G/L account determination

Dear All,

1. what is self invoice revenue account ? how it works in B1 and in what condition ?

2. what is self invoice expense account ? how it works in B1 and in what condition ?

I am using B1 2005A SP 01 PL 46. Thanks

SA

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 17, 2008 at 11:28 PM

    As I have read, Self Invoice Revenue account relates to Italy and Spain localization. This Account gets used when you crate a Self A/P Invoice for booking. The Journal entry has one debit and one credit entry for VAT which will post to these Accounts.

    Suda

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  • Posted on Jun 18, 2008 at 06:57 AM

    Hello SA,

    For explanation of these accounts please see attached Note 1042795.

    Please also see below for detailed info:

    How to Issue an Internal Invoice

    Introduction

    If a business receives services from a vendor who cannot issue an invoice (for example, for a vendor that works as a wage earner and is not registered as a firm), the business must issue an internal invoice to reflect the services provided by that vendor.

    This document details the process according to which tax liable companies should issue internal invoices.

    The process for issuing internal invoices by tax-exempt companies has not changed and is still applicable.

    Making Initial Settings

    To be able to issue internal invoices, the following settings must take place:

    u2022 From the SAP Business One Main Menu, choose Administration u2192 Setup u2192 Financials u2192 G/L Account Determination. On the Purchasing tab, choose the Tax sub-tab and set the following G/L accounts:

    Field Activity/Description

    Self Invoice Revenue Account Specify a revenue account to be credited when an internal invoice is posted (an example for a journal entry created by the internal invoice is provided later).

    You can only specify a G/L account that is a revenue account here. This is required for correct calculation of the Tax Report.

    Self Invoice Expense Account Specify an expense account to be debited when internal invoice is posted (an example for a journal entry created by the internal invoice is provided later).

    u2022 Make sure that the vendor for whom the internal invoice is issued is specified as u201CSelf-Employedu201D. To check this information, choose Business Partners u2192 Business Partner Master Data and on the Accounting tab choose the Tax sub-tab.

    Posting an Internal Invoice

    Follow the procedure below to issue an internal invoice for a self-employed vendor in a tax liable company.

    1. From the SAP Business One Main Menu, choose Purchasing - A/P u2192 A/P Invoice.

    2. In the Vendor field, specify the vendor code.

    The window title changes from A/P Invoice to Internal Invoice.

    3. Enter all required details and choose Add.

    Result

    When you add the internal invoice, the system creates the following journal entry:

    G/L Account/BP Debit Credit

    Expense Account 100 %

    Tax Account (defined in Administration u2192 Setup u2192 G/L Account Determination u2192 Purchasing u2192 General tab u2192 Tax Definition) 15.5 %

    Vendor 100 %

    Tax Account (defined in Administration u2192 Setup u2192 G/L Account Determination u2192 Sales u2192 Tax tab u2192 Tax Definition) 15.5 %

    Self Invoice Revenue Account 100 %

    Self Invoice Expense Account 100%

    Creating an Outgoing Payment for an Internal Invoice

    When you create an outgoing payment for an internal invoice, the system creates the following journal entry (based on the example provided above):

    G/L Account/BP Debit Credit

    Vendor 100 %

    Bank Account 100 %

    If the vendor is subject to a withholding tax and is provided an approval for 2%, the outgoing payment creates the following journal entry:

    G/L Account/BP Debit Credit

    Vendor 100 %

    Bank Account 98 %

    Withholding Tax 2%

    If you need to create an outgoing payment for an internal invoice that was created before this version was upgraded, you need to create the outgoing payment by selecting the payment on Account option, i.e. without selecting the internal invoice in the Outgoing Payment table. If you try to select the internal invoice in the outgoing payment, the following error message appears: u201CInternal Invoice created before upgrade can be paid only as Payment on Accountu201D.

    Cancelling an Internal Invoice

    If you have to cancel an internal invoice, a copy is made to an A/P credit memo. The journal entry created by the A/P credit memo is identical to the journal entry of the original internal invoice, but with a negative sign as shown below (based on the internal invoice in the example above):

    G/L Account/BP Debit Credit

    Expense Account - 100 %

    Tax Account (defined in Administration u2192 Setup u2192 G/L Account Determination u2192 Purchasing u2192 General tab u2192 Tax Definition) - 15.5 %

    Vendor - 100 %

    Tax Account (defined in Administration u2192 Setup u2192 G/L Account Determination u2192 Sales u2192 Tax tab u2192 Tax Definition) - 15.5 %

    Self Invoice Revenue Account - 100 %

    Self Invoice Expense Account - 100%

    If you need to create an A/P credit memo for an internal invoice that was created before the upgrade to this version took place, you must create a manual journal entry to reverse the internal invoice. If you try to create the A/P credit memo based on the internal invoice, the following error message appears: u201CInternal Invoice created before upgrade can be credited only by creating manual journal entryu201D.

    Reporting

    The changes described above are reflected in the reports as follows:

    u2022 Internal invoices posted before upgrading to this version are not included in the Withholding Tax Report, but only in the tax report in the expenses side.

    u2022 Internal invoices created after upgrading to this version are included in both revenue and expenses sides, so the influence on the total tax amount is zero.

    Regards,

    Wilma Wang

    SAP Business One Forums Team

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