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Coupa Success Portal

Validating Taxes on Invoices

Overview

Coupa offers the ability to validate taxes on incoming invoices. Now when an invoice comes into Coupa via cXML, SFTP, or CSN, we'll show both the calculated and invoiced tax amount.

How It Works

To use this feature, you need to enable the tax engine and tax validation on the invoice presentation. You can choose to use Coupa's native tax engine, or an external third-party tax engine.

To get the maximum benefit out of tax validation, you should set up invoice tolerances based on invoices taxes. See A Primer on Invoice Tolerance Settings in Coupa for more info.

Enabling the Tax Engine

  1. Go to Setup > Company Information and scroll down to the Invoice section.
  2. Select Enable Tax Validation and choose the type of engine you want to use: Native Tax Engine or Tax Engine Callback Url. if you choose to use a callback, you'll also need to specify the URL, beginning with http or https.
  3. Scroll down and click Save.

Enabling Tax Validation on an Invoice Presentation

  1. Go to Setup > Invoice Presentations and choose the presentation you want to modify.
  2. On the presentation, select Use tax engine to validate taxes.
  3. Scroll to the bottom of the screen and click Save.

Enabling native tax engine allows you to compare tax amount calculated via hosted tax code rates in Coupa against tax amount and rate that supplier is invoicing.  To get the maximum benefit out of tax validation, you should set up invoice tolerances based on invoices taxes. See A Primer on Invoice Tolerance Settings for more info.

More Info

3rd Party or ERP Tax Engine Options To Validate Supplier Provided Tax

  • Customers who either subscribe to 3rd party tax engine or have tax engine capability within ERP  can leverage Coupa tax callout capability (Tax Engine Callback referenced above) to not only validate tax provided by the supplier on an invoice, but also pull back additional data into custom fields (i.e. tax code).  That callout requires translation between our format and the tax engine which would be customer owned.  Supplier provided tax data would not be adjusted for compliance reasons, but tax pulled via callback could be utilized to validate supplier's tax and also map on outbound invoice file to ERP.
  • Other customers who have connection to tax engine in their ERP choose to do tax validation completely in their ERP after invoice is integrated from Coupa. Once integrated ERP does calculation and drives appropriate validation if calculated tax is different from supplier provided.
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