AP0000 Accounts Payable Overview

Overview

Package Overview

How To Use This Manual

 When most people receive a new product, they want to use it right away. Unfortunately, this is not quite possible when dealing with computer hardware and software. This manual is intended to serve as a reference guide in describing the functionality and the application of the Accounts Payable package.

The first few sections of this manual are intended to introduce the user to the Accounts Payable (A/P) system and help get started. The latter sections are for reference when the user has specific questions about each of the Accounts Payable applications. These applications are described later in this section under A/P Menu Bar Selections and Definitions.

The Accounts Payable Package allows you to use miscellaneous or one‑time‑payment vendors. Miscellaneous vendors are vendors your company will have very limited A/P activity with. The advantage of using miscellaneous vendors is keeping the number of vendors in your vendor file limited to vendors you regularly do business with. When the miscellaneous vendor has been fully paid and the A/P Open Item file is purged, the vendor will be deleted from the Master Vendor file and the vendor totals will be added to the default miscellaneous vendor number *99999. This will keep the vendor file free of inactive or one‑time‑payment vendors. The *99999 vendor number will maintain year‑to‑date totals for all deleted miscellaneous vendors.

It is suggested that the user first read the System Manager manual. The Package Overview section of this manual gives an overview of the Accounts Payable Package. The General Operator Instructions in the System Manager manual explain how to enter and edit data and the use of special keys on the keyboard. The Startup section gives step‑by‑step instructions on how to load the programs, create the data files and enter the initial data. The Processing Procedures section gives direction in daily, period and year-ending procedures.

The user should then scan each of the A/P sections to understand how each of the A/P applications work. A very basic description of each of these applications is also contained under the heading A/P Menu Bar Selections and Definitions which is part of this Package Overview.

Data Load Sheets are included in this manual under many of the applications. These sheets may be used to manually fill out the data that must be entered at the computer. They may be helpful in easing data entry.

Sample screens and reports are also included under each of the appropriate A/P applications. These are a guide to show the user the type of screens and reports that may be obtained from the system.

A/P Menu Bar Selections and Definitions

There are many Accounts Payable functions that can be performed by the A/P package. These applications are as follows:

Maintenance

Vendor File

Allows entry of the basic information about every vendor you do business with. Almost every major application in the A/P package uses the Vendor file to ensure that processing done to a vendor is handled according to the specifications for that vendor.

A/P Account File

Allows the user to designate which G/L accounts may be used with the A/P package.

FOB Code File

Allows the user to specify FOB codes associated with each vendor.

Ship Via Code File

Allows the user to specify ship via codes associated with each vendor.

 Job Code File

Allows the user to specify allowable job numbers.

Check File

Posted check file maintenance.

Inquiry

Vendor Account

Allows you to view on the screen all the open items in a vendor's account.

Vendor File

Allows you to view on the screen detail information about each vendor.

Processing

A/P Transaction Processing

Allows you to enter all day‑to‑day A/P transactions.

Recurring Voucher Processing

Allows you to enter payables that recur on a regular basis and for which there is no invoice or reminder of when payment is due.

A/P Open Item Adjustment

Allows you to make adjustments to items in the A/P Open Item file. You may change the Due Date, Discount Date, Allowable Discount Balance or you may enter a manual payment for an open item.

Post A/P Transactions

This application will update the files in A/P with the information that was in the A/P Transaction File.

Post Recurring Transactions

This will update the A/P transaction files in A/P with the information that was entered in the Recurring Voucher Processing application.

 Post Adjustment Transactions

This application will update the A/P Open Item File files and A/P Distribution to G/L file in A/P with the information from the Open Item Adjustment entry application.

Post A/P Checks

This application will update A/P files with the information that was printed in the Print A/P Checks application.

 Payment Preparation

 Allows you to select vouchers for payment or deferral.

 Check Reconciliation

Allows you to select checks to mark as paid, then print an Accounts Payable Check Reconcilia­tion report that will show which checks are paid and which are unpaid. The reconciled checks may then be purged from the file.

Void Checks After Posting

Allows you to void a check that has been posted to the A/P files.

Purge A/P Open Item File

Allows the user to purge all invoices that have been fully paid from the A/P Open Item file up to a particular cut‑off date by vendor.

Clear Vendor YTD Accumulators

Allows the user to move the current year‑to‑date purchases and discount values to last‑year purchases and discount values and then clear the current year‑to‑date values.

Print A/P Checks

Allows you to print checks that have been selected in Payment Preparation.

Print/Create 1099 Forms

Allows you to print Federal 1099-MISC forms once a year for the government. They are printed for individuals who received compensation from your company.

Reports

A/P Open Item Report

Allows you to print a report of all items in the A/P Open Item file. These items include all new A/P transactions that have been posted.

Cash Requirements Report

Allows you to print a report of the cash needed to pay all A/P open items up through a certain date.

A/P Distribution to G/L Report

Allows the user to print a report showing the account distributions that will be interfaced to G/L.

Check History Report

Allows the user to print a report showing information on checks, which have been written since the last purge date of the A/P Open Item file.

Vendor Analysis Report       

Allows the user to print the Vendor Analysis Report, which compares purchases and discounts for the different vendors for the year‑to‑date and for last year.

Vendor History Report

Allows the user to print a report showing information on paid vendor invoices if they were paid since the cut‑off date of the last purge of the A/P Open Item file.

Job Distribution Report

Allows the user to print the Job Distribution Report, which gives a breakdown of expense distributions by  G/L account number for each job.

 Job Analysis Report           

Allows you to print a report that shows all PR expensed, A/P expensed, and A/R billed against a job, and compares these to budgeted job figures.

Vendor Audit Trail Report

Allows you to print detailed information about the Vendor File and how it has been changed. This option needs to be turned on in A/P Setup under the Util_setup pull down window before you can use this report.

Pre-Check Writing Report

This report will detail all information that will be printed on the checks. The Pre-Check Writing Report should be run BEFORE you print your checks.

Check Reconciliation Report

This report will help in reconciling your statements from the bank.

Manual Check Register Report

The register of Manual Checks may be printed with this option. This report must be run after printing manual checks.

Check History Distribution Report

Auditing report for invoice line item paid the check.

Util setup

A/P Setup

Allows the user to tailor the Accounts Payable package to the way you do accounting in your company.

Print Spooled Reports

This will allow you to display to the screen or to print all reports that were sent to the hard disk drive from A/P applications.

Reset Fully Paid Status

This procedure resets the fully paid flag status for records in the A/P Open Item File.

Global Utilities

These are extended features and functions available on a “Pick & Choose” basis.

             A/P Global Control

             Receiving Accrual Account Reconciliation

             Speedy Voucher Processing

             Remit-To Vendor

             A/P Batch Processing


 Some Accounts Payable Concepts and Terms

A few accounting terms should be defined here for those who may not have much background in accounting.

Accounting is the keeping of financial records of a business concern (and the analysis and interpretation of those records). An account is one category of the records that are kept; for example, all records concerning a particular customer's transactions would make up that customer's account.

Next, accounts payable is simply the money that your company owes to its vendors in exchange for goods or services received but not yet paid for. A vendor is simply a person or company who sells goods or services.

Debit (abbreviated DR) is an item of debt as recorded in an account. It is a type of entry in an account. Credit (abbreviated CR) is essentially the opposite type of entry in an account.

We will frequently use the term transaction, which is an instance of doing business, or an exchange. Typical transactions in this Accounts Payable system are the recording of new items of Accounts Payable and the printing of checks (that is, payment transactions). The word transaction is frequently abbreviated as TRX.

When transactions are entered into the computer to record them, they are usually entered into a temporary Transaction File. The transaction in the Transaction File can be easily changed or deleted. After the correctness of the transactions has been verified, they may be posted to become part of more permanent data files, similar to the way that, in bookkeeping, transactions are posted from a journal (book of daily transactions) to a ledger (a final book of accounts).

We frequently refer to vouchers in Accounts Payable. A voucher is an authorization to pay for something. It is a document that serves as proof that a transaction occurred. For example, when new A/P transactions are being entered, each transaction (for example, the receipt of an invoice from a vendor) generates a voucher. Vouchers are identified by a voucher number. Sometimes there is actually no piece of paper associated with a voucher that is in the computer. For example, when someone refers to vouchers that are in the computer, it does not mean that, if you open the computer cabinet, you will find a pile of paper vouchers stored there. What it means is that the data relating to vouchers is stored on the computer's disk and that the computer is capable of printing a record of the actual vouchers at some later time.

We also have the concept of a document that can apply to another document. For example, if your company purchases an item from a vendor and a voucher is made to indicate that there is an Accounts Payable open item pertaining to that vendor, the vendor or your company may discover that the price charged for the item was too high. A credit memo might be sent out by the vendor to decrease the amount owed. This credit memo would be entered as a voucher that would decrease the Accounts Payable while a regular invoice would increase the Accounts Payable. A debit memo, in which the vendor advises your company that it owes an additional amount, acts to increase Accounts Payable. When your company pays the vendor, for example, by a computer printed or handwritten check, the Accounts Payable is decreased.

The General Ledger is a collection of accounts into which all the financial transactions of the company are distributed after being classified. Each General Ledger account is identified by an account number. This number is divided into three parts: a main account number, profit center, and department number. The format of an account number is XXXXX‑YYYYY-ZZZZZ where XXXXX represents the main account number, YYYYY the profit center, and ZZZZZ, the department number.

The profit center number is useful for tracking income and expenses associated with different profit centers within a company. For example, your company might have two major divisions associated with the sale of product type A and product type B. To keep separate accounts of income and expenses associated with the two different product lines (profit centers) you could assign a profit center number of 100 to all income and expense accounts associated with product type A and a profit center number of 200 to all income and expense accounts associated with product type B.

This example is taken a step further by dividing each profit center into functional departments, such as sales, marketing, advertising, customer support, or education. The income and expenses associated with each departmental group could then be identified with a department number.      

In double entry bookkeeping, debit and credit entries are made to different General Ledger accounts so that the entries exactly balance. That is, the total of the debit entries equals the total of the credit entries for a particular transaction. For example, suppose your company makes a payment on its account with a vendor. The Accounts Payable account of the company (the amount owed to the vendors) would be debited while the cash in the bank account would be credited. Thus the debit and credit in these two accounts would offset each other and equal zero.

Another concept of importance is discount. From an A/P viewpoint this is a reduction in the amount your company owes to a vendor. Frequently, discounts are granted by a vendor if payment is made on or before a certain number of days after the invoice is presented. For example, companies often allow a two‑percent discount if payment is made in 10 days from the date of the invoice. A valid discount then is one that is claimed within the proper time limit.

The age of Accounts Payable open items is of interest. The age is simply how old in days the Accounts Payable item is. It is important when keeping track of discounts so as not to lose their validity. Also interest may be charged by the vendor on Accounts Payable which have a certain age, for example, more than 30 days past due.

Other accounting and Accounts Payable terms will be explained as they are encountered in describing the A/P applications sections of this manual.

A/P Accounting Considerations

Profit Centers

Profit centers are branches or possibly departments of a company, which are considered to be separate from each other in terms of revenue and expenses. The purpose for setting up profit centers is to determine the profitability of the different areas. This is done by setting up separate revenue and expense accounts for each profit center and distributing the revenues and expenses to the appropriate accounts. For example: the expense accounts for branches A, B, and C might be 50000‑10000-00000, 50000‑20000-00000, and 50000‑30000-00000, respectively. When an invoice comes in for merchandise needed exclusively by profit center B, then the entries generated would be a credit to A/P and a debit to expense account 50000‑20000-00000.

Job Numbers

Jobs are particular projects, activities, or contracts. The purpose for setting up a job is to allow tracking of expenses associated with it in order to determine its cost. Each job for which expenses will be tracked is given a number. When each new A/P transaction is entered into the system, the invoice amount can be distributed to one or more jobs. Then, after vouchers have been posted, a Job Distribution report can be printed which will itemize all expenses for each job. Expenses can be tracked by job and by profit center concurrently.

Multiple A/P Accounts

Multiple A/P accounts really only have significance in G/L. They would be used if you want to have a breakdown of different types of A/P shown on the Balance Sheet and Trial Balance. When multiple A/P accounts are being used, the A/P account number will be entered on each new A/P transaction entered into the system. The field will, however, default to any account number you wish.

Multiple Cash Accounts

It is best to have at least two cash accounts if you will be printing computer checks and writing checks manually. Using two cash accounts will avoid confusion that could be caused by having both types of checks appear together on reports, such as the Check Register and the Check Reconciliation report.

Discount Account

When a payment is made in A/P, it normally consists of a debit to A/P and a credit to cash. If a discount is taken, the debit to A/P will be larger than the credit to cash and the difference will be posted as a credit to a discount account. For example, there is a $10.00 invoice with a $1.00 discount. A $9.00 check is written to fully pay the invoice, so there would be a $10.00 debit to A/P, a $9.00 credit to cash, and a $1.00 credit to discounts. The discount account would normally be considered a revenue or an expense account with a typical credit balance.

Miscellaneous Charges Account

Miscellaneous charges are an expense. If this expense is to be distributed to the different expense accounts, jobs and profit centers, along with the rest of the invoice amount, then a miscellaneous charges account need not be set up. If, on the other hand, miscellaneous charges are always to be posted to a particular account and are not further distributed, then a miscellaneous charges expense account is needed.

Sales Tax Account

Sales tax is an expense. If this expense is to be distributed to the different expense account, jobs and profit centers, along with the rest of the invoice amount, then a sales tax account need not be set up. If, on the other hand, sales tax is always to be posted to a particular account and is not further distributed, and then a sales tax expense account would be needed.

Freight Charges Account

Freight charges are an expense. If this expense is to be distributed to the different expense accounts, jobs and profit centers, along with the rest of the invoice amount, then a freight charges account need not be set up. If, on the other hand, freight charges are always to be posted to a particular account and are not further distributed, then a freight charges account would be needed.


 

Accounts Payable

  1. AP0000 Accounts Payable Overview
  2. What Is The Difference Between Payment Date and Check Date during Print AP Check?
  3. How to Purge AP Distribution to GL Report
  4. DYO (Design Your Own) AP Laser Check Design
  5. How Can I Get a List of New Vendors Set Up Since a Certain Date?
  6. Why Doesn't the System Print the Bottom Stub on My Design-Your-Own AP Laser Check?
  7. System Period Control Does Not Apply to Recurring Transactions
  8. AP Check History Report That Includes Voided Check
  9. ERROR 035 on AP TEMP CHK File
  10. Feature - Voucher Criteria On Vendor Account Summary
  11. Feature - Voucher Reference on A/P Distribution to G/L Report
  12. Feature - A/P Simple Trx Processing
  13. AP01S4 Accounts Payable Vendor Audit Trail Report
  14. AP05S1 Accounts Payable A/P Open Item Report
  15. AP07S1 Accounts Payable Cash Requirements Report
  16. AP08S1 Accounts Payable Pre-Check Writing Report
  17. AP08S2 Accounts Payable Post A/P Checks
  18. AP08S4 Accounts Payable Void Checks After Posting
  19. AP10S1 Accounts Payable Check Reconciliation Report
  20. AP11S1 Accounts Payable Check History Report
  21. AP13S1 Accounts Payable Vendor History Report
  22. AP22S1 Accounts Payable Purge AP Open Item File
  23. AP0200 Accounts Payable Post AP Transactions
  24. AP0301 Accounts Payable Recurring Voucher Processing
  25. AP0302 Accounts Payable Post Recurring AP Transactions
  26. AP0400M Accounts Payable Vendor Account Inquiry
  27. AP0601 Accounts Payable Open Item Adjustment
  28. AP0800 Accounts Payable Payment Preparation
  29. AP0900 Accounts Payable AP Distribution to GL Report
  30. AP1001 Accounts Payable Check Reconciliation
  31. AP1200 Accounts Payable Vendor Analysis Report
  32. AP1400 Accounts Payable Job Distribution Report
  33. AP1500 Accounts Payable Job Analysis Report
  34. AP1600 Accounts Payable A/P Setup
  35. AP1701 Accounts Payable A/P Account File Maintenance
  36. AP1801 Accounts Payable FOB Code File Maintenance
  37. AP1901 Accounts Payable Ship Via Code File Maintenance
  38. AP2001 Accounts Payable Job Code File Maintenance
  39. AP2100 Accounts Payable Print/Create 1099 Forms
  40. AP2300 Accounts Payable Clear Vendor YTD Accumulators
  41. APDISSCN Accounts Payable Distribution History Report
  42. APINVIMS Accounts Payable Invoice Import Utility
  43. AP0100 Accounts Payable Vendor File Maintenance
  44. AP0202 Accounts Payable Transaction Processing
  45. FULLPAY Accounts Payable Reset Fully Paid Status
  46. Feature - Default Value For Create Variance Prompt
  47. Feature - Assign Next Manual Check Number in Computer Check Printing
  48. Feature - Added First Bank Export Format to Checks History Export
  49. I Forgot to Clear the AP Vendor Paid Accumulators at Year End

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