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Tax amount on first customer invoice

Hello,

I need your expertise for the below scenario.

customer will buy a product for $1000 and tax $10% = $1010 total amount.

but amount will be paid in 3 invoices based on the percentage of 25% 1st invoice, 50% 2nd invoice, 25% 3rd invoice but the total tax of $10 should be billed on the 1st invoice $250 + $10 = $260 when product is delivered. But the remaining invoices are created for $500 & $250 (no tax) to customer and no product is delivered.

Kindly advice how to achieve this scenario...how sales order needs to be created with above percentages and how system will include total taxes for 1st customer invoice only upon PGI and how it will be zero tax on remaining invoices and how these invoices will be created for remaining amounts(since remaining invoices are not with reference to delivery)

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4 Answers

  • Feb 01 at 08:27 AM

    Once the first invoice is generated, you can change the tax classification to "Tax exempt" in sale order so that the subsequent billing documents have only the sales value.

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  • Feb 01 at 08:41 AM

    Maintain tax on with condition record including Material, and then post debit memo for remaining invoices with reference to the original invoice in which you received the goods!

    Thanks,

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  • Feb 01 at 10:44 AM

    You might go ahead with the standard down-payment process.

    But in standard down payment, not sure whether system allows to calculate taxes (that too full tax)

    By the way, how many line items are applicable in this scenario? Is your requirement item wise (25% before delivery and rest after delivery)? or is it complete order wise?

    Check if you can meet this requirement using standard down payment with multiple line items

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  • Feb 02 at 01:47 AM

    Hello All,

    Thanks for your quick response. But i think you miss-understood my requirement. Let me reiterate the scenario.

    This scenario is common in life science industry...equipment sale to customer and the amount is billed by company to customer in installments on basis on certain percentage(25%, 50%,25%)

    I want to create a sales order for a product sale .i.e $1000 + $10 taxes = total $1010

    The amount $1000 needs to billed to customer in 3 installments as stated above on percentages:

    1 invoice - 25% of $1000 + total tax $10 = $250 + $10 = $260 . Upon the product is delivered and first invoice is created(note: total tax has to be 1st invoice itself and no tax on remaining installments invoices)

    2nd invoice - 50% of $1000 = $500 (not tax - since it needs to included in 1st invoice)

    3nd invoice, - 25% of $1000 = $250 (not tax - since it needs to included in 1st invoice)

    Kindly advice how i can achieve this scenario using sales order and invoices. I cannot use payment term - installment solution. Since its create one invoice and the total product price $1000 + $10 gets capture on 1 invoice(which is not my req) and also it create AR entries for remaining installments on FI lines(basically it is not creating invoice but payment terms entries are created for collecting remaining installments) .

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