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The Accounts Payable process involves entering A/P Invoices which in turn creates a Transaction to update the Chart of Accounts and the Contract Records for the costs incurred. The A/P Invoices may be paid either by Vendor or Due Date creating another Transaction to record the payment in the Chart and also used to print the checks.

Click below for greater detail on the following subjects:

Vendor Record	Accounts Payable Invoice
Terms Table	Pay Accounts Payable
Post Transactions

THE VENDOR RECORD

Each vendor is assigned a Vendor Number. The number is a six digit alphanumeric field. The Vendor Record is used to store the information necessary to print checks and 1099's and keep a running balance of the amount owed.

THE TERMS TABLE

The Terms Table contains a list of user-defined payment terms. A code entered into the Vendor Record refers to this table to set the due date on A/P invoices.

THE ACCOUNTS PAYABLE INVOICE

The primary point of input in Accounts Payable consists of the Accounts Payable Invoice. The Invoice document is used to pay the Vendor and to print an Aging of Accounts Payable Invoices and the Accounts Payable Reconciliation.

Vendor invoices can be coded and entered on a daily basis. Month and Year End closing dates will not affect this procedure. When an Invoice Record is created the distribution of the expense is created in the form of a Purchase (P) Transaction for posting to the General Ledger and all other subsidiary records. The system assigns the Invoice Number, the Purchase Transaction number is the same as the Invoice Number.

The amount of the Invoice must agree with the amount credited to Account 2100 (Accounts Payable) on the Purchase Transaction. The total amount distributed on the Purchase Transaction can be greater than the amount recorded to Accounts Payable, in which case an additional credit would be recorded on the Purchase Transaction. The most common example of this situation is in dealing with Employee advances.

EXAMPLE:

An employee has a travel advance of $200 which, when issued, was charged to travel advances. An expense report is submitted for $994 less the $200 advance, leaving an amount due of $794. The A/P Invoice would be entered for $794; the Purchase Transaction would show a credit of $794 to Accounts Payable, a credit of $200 to Travel Advances, and a debit of $994 to Direct Travel Expenses.

After Invoices have been entered, the Purchase Transactions are printed, proofread, and corrected.

PAY ACCOUNTS PAYABLE INVOICES

One of three methods can be used to create the Cash Disbursement (D) Transactions which are used to pay the vendors. These methods are:

PAY INVOICES BY VENDOR - The operator enters the Vendor Identification number. All unpaid Invoices are displayed. The operator selects the Invoice(s) to be paid which in turn creates a Disbursement Transaction. Discounts can be taken and partial payments made using this method.

PAY INVOICES BY DUE DATE - The operator enters a range of due dates to pay a Cash Requirements Report is printed. The report displays, for each vendor, the unpaid invoices that are due within that period. Exclusions may be made from the report and the disbursements are created based on the final report.

ENTER MANUAL DISBURSEMENTS - Cash Disbursements may be entered to record manual checks which pay an Accounts Payable Invoice. The Disbursement transaction must reference the Vendor and Accounts Payable Invoice. If a manual check is written which pays an item which is not in Accounts Payable, a disbursement entry can be made which records the expenses directly to the appropriate account.

The Disbursement (D) Transactions created above are used to print the A/P checks.

POST TRANSACTIONS

Transactions dated in the 'current accounting period' should be posted as soon as possible in order to keep the subsidiary records current. The posting process updates the following records:

The Chart of Accounts

The Contract Cost Record, if applicable

The Vendor Record

The Invoice Amount Paid and Status fields

The transactions may be un-posted and corrected at any time during the open accounting period.

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	PAY INVOICES BY VENDOR - The operator enters the Vendor Identification number. All unpaid Invoices are displayed. The operator selects the Invoice(s) to be paid which in turn creates a Disbursement Transaction. Discounts can be taken and partial payments made using this method.
	PAY INVOICES BY DUE DATE - The operator enters a range of due dates to pay a Cash Requirements Report is printed. The report displays, for each vendor, the unpaid invoices that are due within that period. Exclusions may be made from the report and the disbursements are created based on the final report.
	ENTER MANUAL DISBURSEMENTS - Cash Disbursements may be entered to record manual checks which pay an Accounts Payable Invoice. The Disbursement transaction must reference the Vendor and Accounts Payable Invoice. If a manual check is written which pays an item which is not in Accounts Payable, a disbursement entry can be made which records the expenses directly to the appropriate account.

	The Chart of Accounts
	The Contract Cost Record, if applicable
	The Vendor Record
	The Invoice Amount Paid and Status fields