Tax regulations can be complex, especially when it comes to recoverable taxes. In Canada, most taxes are recoverable, except for Meals & Entertainment taxes, which are only 50% recoverable. Handling this intricacy efficiently within NetSuite can be challenging.

NetSuite Support Solution

A workaround suggested in a SuiteAnswers article (ID 62255) involves creating a new tax account for non-recoverable Meals and Entertainment taxes and splitting expenses into two lines to apply different tax codes. However, this approach presents significant drawbacks as manual journal entries are needed to transfer amounts from the non-recoverable tax account to the expense account, and users must split all Meals & Entertainment expenses into two lines, complicating the process and increasing the risk of errors.

Our Solution

We tackled this tax challenge for one of our clients by deploying a SuiteGL Plugin to their NetSuite account.

Upon saving a transaction, the SuiteGL plugin dynamically adjusts the GL impact of the transaction in real-time. It reverses 50% of the amount posted to the tax account and allocates this portion to the Meals & Entertainment account. This automation ensures accurate accounting, compliance with tax regulations, and eliminates manual adjustments and errors.

To illustrate, let’s consider a vendor bill with a $450 Meals and Entertainment expense.

Without our plugin, manual adjustments would be needed. But with our plugin, two additional custom GL lines are added to the GL impact of the transaction. One reverses 50% of the tax amount, and the other posts the same amount back to the Meals & Entertainment account. Another account can been used on the second line if necessary.

GL impact of vendor bill

However, custom GL lines do not appear in tax reports. To address this, we incorporated two custom fields into the vendor bill lines: Non-Recoverable GST/HST and Non-Recoverable PST. The values of these fields are calculated and set by a script when the transactions are saved and they can be used in a customized tax report.

Vendor bill showing the non-recoverable tax amount calculated by script

 

Custom GST/HST report showing the non recoverable tax amount and the adjusted tax amount.By leveraging our SuiteGL plugin, our client can effortlessly handle Meals & Entertainment taxes within NetSuite, streamlining their processes and ensuring compliance with tax regulations.

Enhancing Efficiency with Custom Solutions

At Softkey Consulting, we’re committed to empowering businesses with tailored solutions to overcome their unique challenges. Our SuiteGL plugin is just one example of how we leverage innovation to simplify complex processes and drive efficiency.

If you’re grappling with tax complexities in NetSuite or facing other challenges in your business operations, we’re here to help. Contact us today to explore how our custom solutions can transform your workflow and propel your business forward.

Share this page

Let’s Connect.

Tell us about your project, and we’ll arrange a free consultation call
to discuss how we can help.