The purpose of this procedure is to make sure invoices received from vendors are properly coded and posted to the A/P module for payment so that checks can be written when you are ready.
A/P Invoice Concepts
When a client is originally setup on your software, there is a field in the master client record that indicates whether the A/P is cash or accrual. If the client is on cash, then entering the invoice for payment through A/P will not create a posting transaction to general ledger when it is entered. It will only create the posting transaction when the check is paid. If the client is on accrual, then entering the invoice for payment will create a posting transaction to general ledger at the time of entry (a debit to expense and credit to payables) and also when the actual check is paid (a debit to payables and a credit to cash). All postings to general ledger occur not by the date of the transaction, but by the month that the A/P module is in when the transaction is posted. This means that if A/P is on cash and the A/P module is in May and you pay the invoice in May but date the check as June 3, for example, it will still post the transaction to May financials. If A/P is accrual and you enter the invoice when the A/P module is in May but don?t pay it until the A/P module is in June, then the expense will show up in May financials.
The above description has practical implications to normal invoice entry. If you are on cash basis, then you can enter invoices as soon as they are received, and determine in what month the expense will be reported by deciding what month the A/P module will be in when the check is written. If you are on an ?accrual? basis, then you should be careful about when the invoice is entered on the system, because the month the A/P module will be in when the invoice is entered is the month it will show up on the financial statements.
It is important to remember that G/L audit trail records are created whenever an invoice is changed or deleted. You can not go in and delete an invoice, for example, and leave no record of its existence. This is also true when changing certain fields in an existing invoice. Also, voiding a check will create reversal invoices for all invoices paid by the check. A record of this transaction will be displayed on check registers, A/P detail reports etc.
Post A/P invoices through the Invoice Maintenance program. Each invoice can be allocated to as many different G/L account#s as needed. Be sure the invoice amount matches the total of the amounts posted to accounts. If the Gross amount does not equal the total of the Invoice Allocation to GL, then an error message will be displayed and the invoice cannot be saved.
The Invoice Due Date is the date due. Most of our clients simply enter today's date. This date is important, because it is the date that is used in selection of the cash requirement report. For example, if you request a cash requirement report with a date of May 25, the system will select for output any unpaid invoice with a due date of May 25 or less. This is the report you use to select invoices for payment. If an unpaid invoice has a due date of May 26, it will not be on this report.
You can enter as many invoices for the same vendor as you want. Only one check per client per vendor will be created each time a check is issued, unless the bank account is shared.
Any invoice can be paid out of any bank account on file for the client. It will default to the bank account designated in the master record for the client, but other bank accounts can also be selected.
If you enter an A/P invoice for the Special vendor then only one (1) check will be issued for each invoice selected to be paid to the special vendor. So, if there are 15 invoices created to be paid to the Special vendor then 15 checks will be issued. This is critical for making payments to vendors receiving only one payment, such as refunds, etc.
Try to keep the descriptions consistent from payment to payment. Include the reason for payment and any customer account number in case the payment is separated from the payment card.