Accounts Payable

AP Posting Cycle

All AP transactions can be posted from the Accounts Payable Transactions menu. Transactions are posted using a three-step cycle.

  1. Enter AP Transactions - Entering transactions consists of typing the information into the computer.
  2. Edit AP Transactions - Consists of running a listing called an edit of the transactions.
  3. Post AP Transactions - Makes the transactions part of the permanent A/P records.

Voucher Numbers and Line Numbers

When an AP invoice is entered into the system a voucher number and line number are automatically assigned by the system. Each company has its own set of voucher numbers so that the system can uniquely identify each transaction.

Most transactions vouchers have only one line number, which are assigned consecutively when necessary. If bills are automatically posted to A/P via the Purchasing Application, the receipt number is used as the voucher number, and line number 9990 is assigned as the line number.

Methods of Managing the A/P System

The A/P system allows you to decide in advance how and when bills are paid. You can base your payment schedule on any of these dates:

  • Vendor Invoice Date – This method of payment is based on the vendor's invoice date. For example, you tell the system to pay all vendor bills dated through a specific date.
  • Due Date – This method of payment is based on the due date of each bill, as determined by the payment terms from each vendor or supplier. For example, you tell the system to pay all vendor bills due through a specific date.
  • Pay Date – You can assign a payment date when you enter a bill. For example, you can tell the system to pay all bills with an assigned pay date through a specific date. Although this payment gives you excellent control over the timing of payments, someone with the authority to assign these pay dates should enter the transactions, or specify a formula for assigning pay dates.
  • Voucher Date – The voucher date is the date that the transaction is entered into the A/P system. This date ensures that payment is based on when the bill was received instead of on the vendor's invoice date. You can tell the system to pay all bills received through a specific date.

Every time you print checks you can chose an alternate method. However, each method depends on the inclusion of certain information when the bills are entered.

Miscellaneous Vendors

Sometimes you need to post bills from a vendor with whom you rarely do business, and you don't want to establish a permanent Vendor File record. You can identify the vendor as a miscellaneous vendor and enter the vendor's name and address when you enter the bill. When the vendor's balance becomes zero, you can purge the record from the system by deleting it. The record is stored in the Miscellaneous Vendor file, and the voucher number assigned to the bill is also assigned as the vendor's Miscellaneous Vendor Number.

What You Need for Posting A/P Transactions

You must assign a transaction code to each transaction, such as bills and payments, that you enter into the system. You should always have a list of the transaction codes available when posting. To obtain a list of transaction codes, see the A/P Demand Reports Menu (option 3 on the A/P menu).

In addition to the list of transactions codes you need a list of the charts of accounts. You should also know which account numbers and transaction codes to assign to each transaction. There are four accounts to be assigned for every transaction:

  • The A/P account to post to
  • The expense account to post to
  • The cash account to post to when payment is made
  • The cash discount account to post to if a discount is taken when payment is made

The cash account, cash discount account, and A/P account default account numbers entered in the Company File are automatically entered when you enter transactions. The default expense account number entered in the Vendor File is also automatically entered. This means you only need to know which account numbers to post when overriding these defaults. This manual does not teach these accounting principals in detail. The A/P manager should be responsible for assigning account numbers. To obtain a list of chart of account numbers run the Chart-Of-Accounts Listing found on the A/P Demand Reports Menu, or use the Chart of Accounts Search to see a list on the screen.