The Accounts Payable module provides information to help reduce expenses and increase cash flow by avoiding late-payment interest charges, taking advantage of prompt-payment discounts and eliminating costly errors such as duplicate payments.
The system utilizes voucher numbers as a basis for invoice identification and tracking. It supports multiple currencies, essential if you work with foreign vendors.
Vendor information includes vendor contact name, date the account was opened, date of last purchase, date of last payment, year-to-date invoices with amounts, payable terms and discount percentages, normal expense account, and currency, etc.
Vendors can be set up to use different currencies. This allows you to enter amounts and maintain accounts using your vendor's currency. E.g. a Japanese vendor's account is maintained in Yen. If you purchase 5,000 Yen worth of goods or services, A/P inquiries will show an outstanding amount of 5,000 Yen. When selecting for payment, the invoice for 5,000 Yen can be selected and a check for 5,000 Yen will be printed.
Vendor information can be brought up on the system quickly and easily in the Accounts Payable inquiry mode. The vendor can be selected by vendor number, vendor name, and phone number or by scanning. Vendor lists can be produced either in vendor number or vendor name sequence. All vouchers and payments on file for the vendor are displayed on the screen, along with account by number of days from the aging invoice or due date. The display also includes summary totals by age.
Invoices can also be located in other companies set up on the same computer system if you know the other company's phone number and the invoice number in question. This is extremely helpful when a business utilizes multiple companies and you are not sure which company you posted the invoice in.
For day-to-day accounts payable work, the system allows for entry of new invoices, prepaid invoices and miscellaneous debits and credits.
The system assigns a voucher number to each invoice, then automatically calculates the discounted due date and discount amount, as well as the standard due date based on the terms outlined for each individual vendor. You can override these dates if necessary.
Invoices can be entered for one vendor with the subsequent cheque written to another vendor. This accommodates buying groups where cheques are issued to the head office or other institution. You can also enter one invoice and assign multiple due dates, e.g. enter a $3000 invoice with 3 payments of $1000 dated February 1, March 1 and April 1. Multiple invoices can also be created with one entry for pre-paids such as rent or leases etc. Example: you have to give a landlord 12 post dated cheques for the next 12 month's rent, each for $400. Create one invoice for $400 and 11 more can be generated, each for $400 and each dated with a different month. Post dated cheques can then be printed.
One invoice may be expensed to 999 general ledger expense accounts, with the distributed amounts being verified against the invoice total. Capabilities for edit reporting, voucher register and posting to the Open Item file are provided, with a full paper audit trail.
The A/P module contains a cross reference file which is updated by the POS, Purchase Order, Inventory and Work Order modules when "future payables" are created by items such as purchase order receipts, freight, duty, and brokerage fees, etc.
A typical example would be for purchase orders. You have received the goods but have not yet received the invoice from your supplier.
Another example is adding "third party" freight items to a POS order. You charge your customer for freight (sales amount) since you will be using a "third party" shipping firm, and then enter the cost. Although you have not yet received an invoice from the shipping firm, it will arrive shortly. The cost is then saved as well as other information such as shipping date (invoice date).
When entering a vendor invoice, the system checks the cross reference file for such payables. If any exist, a window appears showing you the payables. Using the "point and shoot" method, you can select the transactions you are creating the payable for. All relevant information will automatically be entered for you. Example, in the case of purchase order receipts, the invoice date, invoice number and amounts are retrieved. They can then be edited if anything has changed.
Much like the Accounts Receivable module, the Accounts Payable module offers a feature to handle recurring expenses (e.g. rent, car payments or lease payments, etc. that are not prepaid with postdated cheques). These types of invoices need only be entered onto the system once and are given a code for how often they should be posted. A record is maintained by the system for each billing, containing the vendor number, general ledger account number, amount, category, type of bill and last billing date. Full editing capabilities and print outs for verification purposes are available prior to posting to the new invoice file. The posting date is recorded for each transaction, preventing invoices from being posted more frequently than they should be.
Aged Trial Balance Report
The Aged Trial Balance Report for Accounts Payable may be printed at the user's request, for all vendors or specific vendors. The cut-off date and reporting date are both user definable. Invoices are aged by invoice date or due date, whichever is preferred. This report may be requested in:
- Detail, showing all invoice detail for each vendor
- By partial balance forward with detailed information beginning at a specified date
- In summary, with an aged grand total for each vendor
- An aged summary total outstanding for all vendors.
Payment selection may be conducted in a variety of ways.
The system can automatically select all vouchers due by a given date or due for a specific vendor. You can also select by voucher number if desired. The Cash Requirements Report acts as a forecaster, showing invoices due by a specified date, plus any discounts valid or lost by that date. This helps you make informed decisions about which bills should be paid and when, taking full advantage of discounts offered and minimizing cash crunches. Invoice payments may be deferred by specific voucher or all vouchers for a vendor. Only those vouchers selected will have cheques printed for them.
A voucher may be selected for partial payment many times if necessary. Every time a partial payment is created for a voucher, the remaining invoice amount is reduced by the payment amount and a separate partial payment record created. Partial payments for an invoice appear on the Accounts Payable Aged Trial Balance report and on the Accounts Payable inquiry screen.
Once the vouchers have been selected for payment, an edit list is produced by the system for analysis prior to printing cheques. This provides another chance to add or defer specific vouchers that may have been selected or missed in error. Cheque printing is controlled by bank account number, so that different cheques may be used for each bank account. Cheque formats (layout) are user definable, allowing for either cheque over stub, or stub over cheque. After the cheques are printed, the system asks if all cheques printed okay. If not, individual vouchers may be selected and those cheques reprinted. When all cheques have been printed correctly, a cheque register is produced and the files are updated. General ledger distribution records are produced at this time as well. If needed, single "quick" cheques can be produced upon demand.
Cheques can also be produced for vendors that do not exist in the system. This is extremely convenient for example, when a "one-time" courier appears and you need to immediately issue a cheque. Enter a miscellaneous invoice to "Joe Courier" and print a cheque from the same screen. The invoice will then post as being "paid".
The cheque reconciliation function provides a record of all cheques issued by the Accounts Payable and Payroll modules for reconciliation with the bank. Cheques are reconciled to the bank statement simply by identifying the cheque number. The cheque amount and vendor name (or employee name) are displayed and if correct, can be flagged as reconciled. Listings may be produced for reconciled, non-reconciled or both, for a specified date range. Reconciled cheques can then be deleted from the "Reconciliation File" up to the date specified. You may also decide to keep reconciled cheques in the system, so that a cheque register can be produced for any period of time desired.
Any cheque can be voided by accessing the Cheque Reconciliation file and deleting it. General Ledger transactions will be automatically created for the A/P Control account and the Bank account. Any invoices paid by that cheque will become outstanding once again.
Custom Menus / Security
As with most other modules, Activant Silk's custom menu design allows you to control which menu options are available to each staff member. This allows you to restrict access to any or all of the Accounts Payable programs.
Full history is maintained on all vouchers, along with the expense accounts. Reports summarizing the expenses can be produced based on a date range, profit centre or range of expense accounts.