DTS Blog

#5 Line Detail Over Invoice Summary

Posted by DTS on Mar 2, 2021 9:38:54 AM


We are half-way through our blog series and line detail over invoice summary is this week's topic.

Although the Procurement and Accounting groups typically wield the most influence on how purchasing data will be stored within the ERP, it’s very important for the Tax Department to push for storing the data at the detail line level. 

Sales and use tax is commonly referred to as a “form over substance” tax.  This means that the specific documentation associated with each purchasing event can weigh heavily on how different auditors may try to impose their jurisdiction’s tax. There’s no arguing that physical invoice copies will always rule the day, but many organizations lack the time, resources, and other means necessary to provide invoice copies for ever purchase that occurred during an audit period.  Further, many tax auditors prefer to utilize spreadsheets to perform an “initial” review before coming onsite for field work.  This is where line detail information can really save the day.

Organizations that capture and store only summary data within the ERP tend to set themselves up for larger audit assessments and/or prolonged reviews, as this practice makes it hard to link use tax accruals with certain item purchases and also forces auditors to perform manual invoice reviews on a much larger population that may be required. 

Topics: Insider