For most invoices you need to distribute two amounts:
- The amount of the invoice net of taxes.
- The tax amount.
You distribute both of these amounts after you enter the document total on the Document tab and tax information on the Taxes tab of the Invoice Entry screen.
Including Tax in the Distribution Amount
If you select Tax Included for a tax authority and Calculate for the Tax Amount field on the Taxes tab, you distribute the invoice total—the details plus the tax that is included in the total on your vendor invoice.
If all the taxes are listed separately, you distribute the amount of the invoice net of tax, then calculate tax on the invoice.
If you select Distribute or Enter as the tax entry method, you always enter the tax amounts on the Taxes tab, then distribute the net-of-tax amount (the rest of the invoice) on the Document tab.
For instructions on distributing tax amounts, see the following topics:
- Manually Entering and Distributing Tax Amounts
- Calculating Included Taxes Automatically
- Calculating Excluded Taxes Automatically
Multicurrency Ledgers
You distribute all invoice and tax amounts in the vendor's currency. Accounts Payable calculates the functional-currency equivalent to the invoice amount using exchange rates maintained in the Currency screens.
You can change the exchange rate, rate type, and rate date for an invoice, using the Rate Information tab in the Invoice Entry screen, but you cannot change the vendor currency.