Often, a vendor requires a payment in part or in full prior to delivery of merchandise or rendering service. This topic covers the complete process flow of generating a prepayment accounts payable voucher and reconciling the corresponding purchase order(s) after the merchandise has arrived, or the service has been performed.
When you first open Voucher Entry, default data may appear in the following fields:
Voucher Date (defaults to today's date)
Period (current open accounts payable period/year)
Batch # (if there exists an open batch)
A/P Account (default accounts payable account)
Status (Ready for Payment or On Hold)
To create a prepayment voucher:
Open a new batch (or select an existing batch). You can use the buttons on the Batch tab in the ribbon to open or select a batch.
Enter a supplier code in the Supplier Code field. The supplier's defaults appear for the currency, payment terms, payment method, accounts payable account, and 1099 status. Verify these defaults and change any values, as necessary.
Verify/change the date in the Voucher Date field to reflect the supplier's invoice date.
Note If the invoice date is not in the range of dates included in the default posting period/year, a message appears that warns you that the invoice date is not in the posting period/year. You can select another (open) posting period/year, change the invoice date, or accept the default posting period/year.
Select the Pre-payment check box. CM is automatically entered in the Type field to indicate you are entering a credit memo.
Enter the supplier's reference number in the Reference # field. This field is usually used for the supplier's invoice number, but if you do not have an invoice at this time, enter the purchase order number or some valid reference number in this field. The system will check for duplicate reference numbers and advise accordingly. If you want to automatically generate the reference number, select the Automatic Reference # check box.
If you are prepaying a purchase order, enter a purchase order number in the PO # field or click the Select button in the ribbon to select one or more purchase orders in Voucher PO Selection. If you click the Select button, make purchase order selections by selecting a purchase order and clicking the Add button (to add one purchase order at a time), or click the Add All button (to add all purchase orders from the grid). If you select multiple purchase orders, the PO # field in Voucher Entry displays Multiple. No reconciliation process will take place at this time because products were not received.
Note The Bill to Location field in Voucher PO Selection defaults to the default bill-to location for your user ID. If the purchase order you want to reconcile is not displayed in the Available PO's grid, you may need to change the bill-to location, or the products for the purchase order may not have been received.
Note When you select a purchase order, a warning message appears if the purchase order's currency, payment method, payment terms, or accounts payable account do not match the values entered in Voucher Entry. The values entered during voucher entry override the values for the purchase order.
Enter the amount you want to prepay in the A/P Amount field.
The Calculated Prepayment Amount field displays the total amount for associated purchase orders. If you want to fully prepay the purchase orders, enter the displayed amount in the A/P Amount field.
Verify/change the expense account in the Expense Account field (usually prepayments post to the designated prepaid expense type general ledger account).
After all data is entered, click the Enter Invoice button in the ribbon to create the accounts payable voucher.
After vouchers are created, other processes include:
Editing an accounts payable voucher - An accounts payable voucher can be edited before or after it has been posted to the general ledger. It cannot be edited after it has been paid. For more information, see Voucher Edit.
Placing a voucher on hold/removing from hold - An accounts payable voucher can be placed on hold during invoice processing by selecting the On Hold option in the Status field. It can be placed on hold after it has been created and released from hold after it is ready for payment. For more information, see Voucher On Hold Update.
Verifying purchase order status (optional) - After accounts payable vouchers have been created for prepayments against upcoming shipments, the Purchase Order Status field does not change on the Main tab in Purchase Order Maintenance until products are received in part or in full. The Voucher Status field does not display a status of Invoiced if a prepayment voucher was processed against a purchase order. That status is only assigned after the purchase order has been reconciled. However, the Relationships tab in Purchase Order Maintenance displays the accounts payable prepayment voucher(s) and the posted status. After the purchase order has been received, it also displays receipt(s) against the purchase order.
Posting accounts payable vouchers to the general ledger - After accounts payable vouchers are created, the vouchers can be posted to the general ledger before processing payments, or after payments are processed and are ready to be posted. You must post to the same posting/period year used in creating the vouchers. Vouchers can be posted by batch or you can post all batches. For more information, see Accounts Payable Post.
To process payments:
Select vouchers for payment. After vouchers have been created (and/or are posted to the general ledger), they are ready for payment. This process is accomplished in Voucher Payment Select. You must select the payment method entered for the voucher during voucher processing or select All to view vouchers for all types of payment methods.
For vouchers not being paid by check or direct deposit (payment method is Cash, Other, Manual, Prepaid, Transfer, Wire, etc), payments are entered in Payment Entry after being paid.
For vouchers being paid by direct deposit, payments are completed in Direct Deposit Payment Entry.
For vouchers being paid by check, total payments must be approved in Voucher Payment Authorize. After checks have been approved for payment, print checks in Check Print.
Post payments to the general ledger. After checks are entered into the system, they must be posted to the general ledger. This is accomplished in Accounts Payable Post. You can select to post all payments or payments for a specific batch number. In addition, if vouchers have not been posted, they too can be posted at the same time.
After the purchase order has been receipted (in part or in full), it can be reconciled for the existing prepayment against the order as well as for any additional payment due to the supplier. The reconciliation of a purchase order against a prepayment is accomplished by creating an accounts payable voucher. The system keeps track of the prepayment amount and any additional amount that you want to pay.
To perform accounts payable/purchase order reconciliation for a prepayment:
Open a new batch (or select an existing batch). You can use the buttons on the Batch tab in the ribbon to open or select a batch.
Enter a supplier code in the Supplier Code field. The supplier's defaults appear for the currency, payment terms, payment method, accounts payable account, and 1099 status. Verify these defaults and change any values, as necessary.
Verify/change the date in the Voucher Date field to reflect the supplier's invoice date.
Note If the invoice date is not in the range of dates included in the default posting period/year, a message appears that warns you that the invoice date is not in the posting period/year. You can select another (open) posting period/year, change the invoice date, or accept the default posting period/year.
Enter the supplier's invoice number or reference number in the Reference # field. The system will check for duplicates and advise accordingly.
Enter the purchase order number in the PO # field or click the Select button in the ribbon to select one or more purchase orders in Voucher PO Selection. If you click the Select button, make purchase order selections by selecting a purchase order and clicking the Add button (to add one purchase order at a time), or click the Add All button (to add all purchase orders from the grid). If you select multiple purchase orders, the PO # field in Voucher Entry displays Multiple.
Note The Bill to Location field in Voucher PO Selection defaults to the default bill-to location for your user ID. If the purchase order you want to reconcile is not displayed in the Available PO's grid, you may need to change the bill-to location, or the products for the purchase order may not have been received.
Note When you select a purchase order, a warning message appears if the purchase order's currency, payment method, payment terms, or accounts payable account do not match the values entered in Voucher Entry. The values entered during voucher entry override the values for the purchase order.
Click the Reconcile button in the ribbon to display A/P PO Reconciliation. This window displays all purchase order line items and corresponding receipts for the selected purchase order(s). By default, all receipts against the selected purchase order(s) are available in the A/P PO Reconciliation window.
If you do not want to reconcile all receipts, click the Select Receipts button in the ribbon to display A/P PO Select Receipts, which allows you to add, remove, or view receipts. When you have finished, click the OK button in the ribbon to close the window, and refresh the receipts displayed in the A/P PO Reconciliation window.
For each line item, enter the quantity invoiced in the Voucher Quantity column, and press the Tab key. When you press the Tab key, the quantity entered in the Voucher Quantity column is entered in the Pay Qty column. You can change this quantity if necessary.
For each line item, verify/change the costs in the Voucher Unit Cost and Pay Unit Cost columns.
If the purchase order has been fully received and the voucher is for the full purchase order amount (and you do not expect any other shipments against the selected purchase orders), click the As Is button in the ribbon to equate the invoice and pay quantities with the expected quantity and fully reconcile the purchase order. If you do this, the purchase order status will become Closed (closed purchase orders cannot be edited).
Note A variance general ledger entry (see General Ledger Account Resolution) only occurs if the check box in the Fully Invoiced column is selected. If the Fully Invoiced check box is cleared, you are expecting additional invoices that must be reconciled for the purchase order receipt. If you are not expecting additional invoices that need to be considered for this reconciliation, then it’s a good practice to click the As Is button in the ribbon, and make any corrections afterwards. Failure to exercise care during this process can lead to a reconciliation problem with the accounts payable clearing account(s).
If you need to reconcile additional charges (such as tax, freight, duty, etc.), click the Additional Charges tab and verify/update the additional charges against the purchase order. Clicking the Update button displays Reconciliation Charge Maintenance, which allows you to accept or edit the invoice and pay amounts. Click the Exit button in the ribbon when done to return to the A/P PO Reconciliation window.
Click the OK button in the ribbon after you finish entering/verifying the desired quantities and costs, and verify the total cost. The Prepayment Usage Selection window appears and displays the prepayments for the supplier.
Verify the correct prepayment amounts are being applied to the reconciliation. You can change the amount in the Usage Amount column to specify how much of each prepayment is used for the reconciliation.
Click the OK button in the ribbon to return to Voucher Entry. The Prepayment Amount Used field displays the amount of the prepayment used for the reconciliation. If the prepayment amount is less than the amount you are reconciling, the remainder displays in the A/P Amount field. If the prepayment amount is greater than the amount you are reconciling, the remainder remains available for additional reconciliations.
If you want to view the account resolution for the reconciliation against the selected purchase order(s), click the Enter Expense Accounts button in the ribbon to display A/P and Expense Accounts Entry. This window allows you to adjust the invoice amount for items that may not have been included on the purchase order (such as tax or additional duty/freight). Adjust the Total field to the amount you want to pay. The difference needs to be allocated to one or more general ledger accounts by selecting the appropriate account type and account(s) and entering the amount to allocate to the general ledger account. After you enter/update general ledger accounts and amounts in this window, verify the Voucher Amount field displays the correct invoice amount, and either click the Enter Voucher button in the ribbon to create an accounts payable voucher or click the Exit button in the ribbon to return to Voucher Entry. The latter will retain the account resolution, and allows you to edit/review the voucher information.
If no further processing is required, click the Enter Invoice button in the ribbon to create an accounts payable voucher.