Invoice Tax Calculation Distribution, when there are Taxable and Non Taxable lines on same invoice.

[HDCJackson]

Looking for some help and Best Practices input here

We often have invoices that have Taxable lines and Non Taxable lines.  When we process the invoices, we have 2 distribution radio buttons to choose from.  Invoice Details VS Itemization Summary.  The Invoice Detail will distribute the tax listed in the header tax field across all lines.  The Itemization Summary button allows us to choose which lines should be taxed and which should not.

Our problem is that neither of these selections actually calculates the tax amount against the extended total amount.  Our AP Processors capture, verify and invoice manage our documents in house and we have to manually calculate the corresponding tax amount to be placed in the Itemization Summary Tax field in the distribution line.

How do other Invoice module users perform this tax distribution breakdown?  How does the Concur In House Capture/Verification group perform this level of tax distribution calculation?  We are looking for a less manual process for the tax distribution calculation.

[PoojaKumatkar]

Hi @HDCJackson ,

I have worked on two invoice implementation projects in the past, during which I identified several limitations within the invoice module. One such limitation is that SAP Concur Invoice does not support multi-tax country requirements. Therefore it requires manual intervention. 

Attaching standard document screenshot for your further reference.

https://help.sap.com/docs/CONCUR_INVOICE/5d4d01ab28704a4fbfa543f20b66966c/8b38bab870891014bbdd65f944...

One of our client raised this requirement and concern with SAP Concur and was looking for a solution, particularly to enable automated tax calculation.

While collaborating with the Concur solutioning team, they proposed the following approach, which we tested internally to assess whether it met the client’s requirements. However, it did not fully meet expectations due to the client’s highly complex needs.

That said, I am sharing the proposed approach with you for reference. If you have simple setup, you may review it, validate it, and test it with a few sample invoices to determine whether it suits your requirements before taking any decision on proceedings.

Note - This will require API integration with Concur and few additional configuration changes in Concur system. For this you may need to take help from your integration team. 

1. OCR reads the invoice and captures the invoice data and creates a payment request
2. Payment request would have the tax fields – tax percentage and tax amount read directly from the invoice
3. Scenario is to validate whether the captured tax amount is correct as per value of the item and tax percentage
4. Using API we will fetch the tax percentage & item value and calculate the applicable tax amount
5. And the calculated tax amount is validated against the tax amount from the invoice (captured in payment request)
6. If the validation is successful, then the invoice is auto submitted to next stage of approval
7. If validation fails then, it will be intimated to invoice owner within in the system
8. The above validation will happen at first step of the workflow immediately after invoice capture and invoice verification
9. Later if processor changes the tax code, then again the similar validation will be triggered

If this answers your query, then please mark solution as accepted.