Article

Dynamics 365 Business Central Sales Tax Journal: Will It Work in North America?

by Kim Dallefeld
MVP, MCT, CEO, Dallefeld Consulting, LLC

Some context for my readers … back in Navision 1.0, we had a Tax Journal. This is where you could adjust sales tax for a customer invoice to reduce the amount of the invoice in the customer ledger and correct the tax ledger which adjusted the Tax Collected Report. In version 2.0, or maybe 3.0, this journal was deprecated.  But while talking to Microsoft MVPs Steve Chinsky, Robb Delprado and Amanda Mayer on a recent Ask the Expert webinar, I was informed that there was a Sales Tax Journal in Microsoft Dynamics 365 Business Central. I was super happy and wanted to give it a try. Keep reading to see what I learned based on my own testing and gathering input from other Microsoft MVPs.

Who needs it? 

Why on earth would you make entries in a sales tax journal? Let’s say that you invoiced a customer with sales tax and then the customer advises that they are sales tax exempt. The answer from Navision, back in the day, was to issue a credit memo and re-invoice the customer without sales tax.  This process totally corrects everything, except that my Accounts Receivable person cannot pay the invoice on the customers check stub as they reference the original invoice number! Add to the confusion the situation where the customer has paid the invoice with the tax and the customer wants a refund. The credit memo to record the corrected amount hasn’t been processed and now what….

With the sales tax journal, you can adjust the customer ledger, tax jurisdictions and the tax collected report. Perfect, right?!

NOT! As you will see in the information below, the journal in Business Central is supposed to be a method to move tax amounts between jurisdictions based on tax postings. However, this journal seems to have been designed to work more in VAT tax environments. It works best for G/L Accounts (Revenue & Expense) where VAT is involved. These G/L accounts would have the General Posting Type populated along with a Tax Bus. Posting Group and a Tax Prod. Posting Group. If this journal is not going to work with Sales Tax, it should be renamed to VAT Tax Journal.

Trying to make it work

We tried to use the Sales Tax Journal but…

Business Central Sales Tax Journal

…began to see several issues:

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Accounting Business Central Dynamics 365 Dynamics NAV Financial Management Tax Management
About Kim Dallefeld

Senior NAV Consultant certified in Dynamics NAV 28 years ago. My goal is to empower companies to get the most out of NAV or BC. Combining years of NAV/BC practical knowledge with accounting, consulting and development background, I bring a unique set of skills rarely found in a technically oriented individual.

Bridging gaps; that's my forte. Identifying what users really need/want in BC to get the blueprint. Preparing a detailed comparison of user's needs versus what BC 'out-of-the-box' will do, lays the foundation of the project. Assisting analysts in how to configure BC to meet the user's requirements is the plumbing and electrical for the system. My developer skills let me build the walls to meet the user requests and so that developers put a roof on correctly! Then I can manage the project and provide communication to keep work on track, on time and on budget.

Giving back to the NAV/BC community is my passion. My blog kimdandnavbc.com offers documents, most of which are ‘how-tos’. I also share documents also on dynamicscommunities.com and I’m the female member of the BC 3 Amigos youtube podcast. I love speaking at DynamicsCon LIVE, Directions, the BC/NAVUG Monthly Meetings (their virtual), Summit Roadshows and Summit. It’s fun to share learned experiences with other users to help them in their BC journey.

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Cynthia
Submitted by Cynthia Priebe… on Mon, 07/15/2024 - 15:23 Permalink

Thank you for the detail on why that feature is a VAT solution not a US Sales Tax solution. And thank you for sharing the correct way to correct invoices for tax differences.

Cynthia