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Prorating Extra Charges and Taxes on an Invoice

Prorating is the process by which the value of a tax or extra charge is distributed over the invoice’s lines. For example, an invoice contains a freight line for $100. The invoice contains two lines, each for $500. Prorating the $100 freight charge results in the cost charged to each line to be increased by $50. Therefore $550 would be charged to the work order or account associated with each line.
The general rules for prorating are:
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Both extra charges and taxes may be prorated. Taxes can be prorated to all invoice lines, including extra charge lines, except for other tax lines. Extra charge lines cannot be prorated to other extra charge lines or to tax lines.
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If an extra charge or tax is being prorated to all lines, the value is prorated to the lines in the following order:
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The charge is first charged to the lines where it has been identified as being applicable (in the case of a tax amount, to the lines where the tax has been identified as applicable). The amount charged is calculated using the tax or charge rule (for example, the tax rate).
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For taxes, if the complete tax amount is not charged to the applicable lines, the remaining amount is divided over the lines where the tax is not applicable, except for extra charge lines. The amount charged to each line is calculated based on the tax rate.
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If the complete charge has not been charged, the remaining amount is divided over all the lines. Each line is charged a percentage of the remaining charge that is equal each line’s percent value of the invoice (excluding taxes and extra charges). For example, if a line’s value is 25% of the total of the invoice lines, the line gets 25% of the amount being prorated.
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If an extra charge or tax is being prorated to applicable lines only, the value is prorated only to the lines which have identified the charge (or tax) as being applicable:
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The charge is first charged to the lines where the charge has been identified as applicable (in the case of a tax amount, to the lines where the tax has been identified as applicable). The amount charged is calculated using the tax or charge rule (for example, the tax rate).
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If all of the charge has not been accounted for the remaining value is prorated to the applicable lines using the same percentage of the charge rule described above.
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Any small amount (for example, pennies) that is left over after the prorating is complete is charged to any line. The full amount of the charge must be accounted for.
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APM attempts to honor the line’s extra charge or tax calculation definition. If the line has an applicable tax or extra charge record, APM will calculate the amount to charge and will attempt to charge the line this amount.
The results of the prorating are seen in the maintenance adjustments for each invoice line.
This topic explains how to select how taxes and extra charges are prorated on an invoice.

To Prorate a Tax or Extra Charge Line

1.
From the Site window, select the Invoicing view, Invoices tab, then the Invoices tab. By default, this tab lists all invoices by supplier.
2.
Double-click the invoice that you want to edit.
3.
Make sure that editing is enabled.
4.
On the Worksheet view, double-click the tax or extra charge line that you want to edit. The Invoice Line dialog appears. The General tab shows how the tax or extra charge is currently prorated.
5.
Select how you want the line to be prorated:
Setting Name
Description
Distribution Rule
Select how you want to distribute the extra charge or tax line among the lines on the invoice. The extra charge or tax can be prorated over the invoice’s lines or charged to a set of distribution accounts:
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Charged to the accounts below: select this option if the value of the line is to be charged directly to selected accounts. The line can be distributed to a work order task, asset, or GL account. It cannot be charged to a warehouse.
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Prorated to all lines: select this option if the value of the line is to be distributed over all of the lines. If this option is selected, the lines do not require the extra charge or tax to be identified as an applicable charge.
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Prorated to applicable lines: select this option if the value of the line is to be distributed over the applicable lines. If this option is selected, the charge is only applied to lines that have identified the charge or tax as applicable. At least one line must have identified the charge or tax as being applicable.
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Charged to one line: select this option if the complete value of the line is to be charged to the selected line. You must select which line to apply the charge or tax to.
6.
When you are finished editing the distribution for the line, click OK.
7.
To edit the distribution of another line, repeat steps 4 to 6.
8.
When you are finished, save the invoice.