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Can AvaTax work with Multiple GL accounts in Dynamics GP?

Overview

Tax Details within GP are limited to posting into one, specific general ledger account. This means that some users will want to establish multiple Tax Details, organized either geographically or by jurisdiction.

Environment

Microsoft Dynamics GP

Resolution

  • Because Avatax customers are required to use only one Tax Detail per Tax Schedule, the only way to force tax to bucket into more than one GL account is to use multiple tax schedules (usually organized geographically).
    • This means that tax buckets into a different ledger account for each area.
      • Typically,companies who employ multiple tax schedules will group the schedules by state. 
    •  This setup extremely advised against by Avalara support because our settings and utilities are designed around using only one Tax Schedule value. 
  • The steps to configuring multiple tax schedules are as follows:
    • Access the Tax Detail Maintenance window via the Microsoft Dynamics Gp menu. The menu path is:  Microsoft Dynamics Gp=>Tools=> Setup=> Company=> Tax Details
    • Create a new Tax Detail by typing a new TaxDetail ID into the “Tax Detail ID” field. When creating multiple Tax Schedules within an AvaTax Environment, we recommend titling the Tax Detail with the same value that the Tax Schedule will have.
      • Since customers typically organize multiple tax schedules by state, the standard format is “AVATAX- (stateabbreviation)”.
      • Ensure the Type field holds the value“Sales” (default).
      • Enter the general ledger account number that tax should be bucketing into, when using this Tax Detail, by typing a number in the ACCOUNT field or by using the native GP search function (magnifying glass).
        • Ensure that the Percentage field reads 0.0%(default).
        • Save the Tax Detail ID
    • Repeat steps 2 through 6 until you have created a Tax Detail ID for each geographical area based general ledger account you wish to organize tax into.
    • Navigate to the Tax Schedule Maintenance window via GP menus. Menu Path: Microsoft Dynamics GP=> Tools=> Setup =>Company=> Tax Schedules
      • Create a new Tax Schedule ID by typing the name you wish to give the tax schedule in the field. All AvaTax Tax Schedules must begin with “AVATAX- ”. 
        • Typically AvaTax users will want to name the Tax Schedule in the same fashion that they named the previously created Tax Detail, which they will be assigning to this specific schedule.
      • Assign the appropriate Tax Detail ID to the Tax Schedule, by highlighting the Tax Detail ID in the Available Tax Detail IDs column, and move it into the “Selected Tax Detail Ids column, by pressing the insert button.
    • Repeat step 9 and 10 until you have one Tax Schedule for each previously created Tax Detail.
      • Often, this means creating a new schedule for each state, where tax will be collected.
  • Once all tax schedules have been created, make sure to assign them appropriately on customer records.
    • This means that the correct Tax Schedule value will pull across when creating transactions, and will ensure that there is no need to manually edit the transaction, in order for tax to bucket into the correct general ledger account.