When posting a prepayment invoice with sales tax, there is error message ‘Tax direction must be specified on ledger account’ and the update is cancelled.

The General Ledger parameter ‘Tax direction requirement’ is active (General ledger>Ledger setup>General ledger parameters>Sales tax>Tax direction requirement) and the main accounts, involved with prepayment invoice posting, already have tax direction definition ‘sales’.

It should be possible to post prepayment invoice with sales tax without changing General Ledger parameter ‘Tax direction requirement’ value.