Sales Tax Accounting Guide

Below is a reference guide on the various ways to record accrued sales tax in the general ledger, based upon how your earnings operation collects payment.  It is important to note that any cost center journals to the 20500 Accrued Sales Tax ledger account for a sales month must be recorded in that same accounting period, so that the tax liability is recorded in the proper period.  This means you have up until business day 5 of the following month (finance month-end close) to record the accrued sales tax for that sales month/accounting month. The OSU Sales Tax Reporting Form is due to tax@osu.edu on or before finance month-end close.

Table of Contents

• Point-of-Sale Systems
• External Accounts Receivable Systems
• Workday Customer Invoices
• Workday Cash Sales (not related to External AR)
• Workday Customer Invoice or Cash Sale Adjustments
• Sales Tax Allocation and Remittance

Point-of-Sale Systems

If your operation uses a point-of-sale device and collects sales tax at the time of sale, the amount of cash collected will be posted automatically to the worktags provided to Treasury when you set up your point-of-sale system.  Most operations are set up to post to revenue 42000 Sales and Services.  At the end of the sales month, you must record a manual cost center journal to appropriately move the amount of sales tax collected for the month to 20500 Accrued Sales Tax.

External Accounts Receivable Systems

If your operation uses an accounts receivable system external to Workday, at the end of the sales month, you must post a manual cost center journal to record your accounts receivable, revenue, and any accrued sales tax into Workday using a cost center journal.

Workday Customer Invoices

If your operation uses Workday Customer Accounts to bill customers, you should enter tax details directly on the customer invoice.  See the Create Customer Invoice job aid on the ARC for more details.  Entering tax details on the invoice will appropriately record accrued sales tax on the customer invoice, and no additional manual entry is needed. 

Workday Cash Sales (not related to External AR)

If your operation uses cash sales to record incoming funds, and you do not use an external receivables system, you should enter tax details directly on the customer cash sale.  See the Record Cash Sale job aid on the ARC for more details. Entering tax details on the cash sale will appropriately record accrued sales tax on the cash sale, and no additional manual entry is needed. 

Workday Customer Invoice or Cash Sale Adjustments

If you forget to enter tax details on your Workday Customer Invoice or Cash Sale, you must enter a cost center journal to record the amount of accrued sales tax collected.

Sales Tax Allocation and Remittance

After finance month end close, the Controller’s Office will run an allocation to sweep the accrued sales tax collected from unit worktags to central worktags.  The Tax Office will then prepare the consolidated sales tax return on behalf of the entire university and remit the sales tax collected to the State of Ohio.