> Accounts Payable Introduction

Accounts Payable Introduction

The Accounts Payable system provides an efficient method for recording purchases and supplier invoices as well as making expense distributions. The module can be installed standalone or integrated with other modules in the SYSPRO system.

Included are facilities for maintaining, verifying and reporting supplier account information. In addition, this module offers optional two-step invoice entry allowing users to enter, approve and then pay an invoice. Audit trails and journals are extensive and form an integral part of the module. For each supplier, both invoice and transaction details are retained from which cash requirements, forecasting and purchase analysis may be printed. Suppliers can be held in local or foreign currency and multi-branch accounting is available. Additionally, free-format checks and remittances can be designed

Configuring Accounts Payable

This task outlines the procedures that you should follow to set up your Accounts Payable module before you begin to process transactions.

Some of these steps are optional and depend on how you intend implementing this module.

  1. Select the Company Maintenance program.

    Navigate to the Key Types tab.

    Select the Key type you require for your supplier codes as being either numeric or alphanumeric.

  2. Select the General Ledger Codes program.

    Define the General Ledger control accounts for the Accounts Payable module.

    If you want to integrate Accounts Payable to the General Ledger, then you require the following account codes in the General Ledger:

    • Accounts Payable control account.

      You can define one A/P control account per branch or a single A/P control account for the company.

    • Default Merchandise account
    • Default Freight charges account
    • Input tax account
    • Settlement discount tax account
    • EC VAT on acquisition account if you selected the tax option: EC VAT system required (Tax Options - General tab).
    • Withholding tax account if you selected the tax option: Withholding tax required (Tax Options - Withholding Tax tab).
    • Default QST account if you selected the tax option: Second tier tax is set to Required (Accounts Payable Setup - Tax tab).
    • Settlement discount QST account if you selected the option: Settlement discount - Request QST amount (Accounts Payable Setup - Tax tab).
    • Contra suspense account if you want to offset supplier invoices against customer invoices using the Customer - Supplier Contra program. This should be the same Contra suspense account defined in the Accounts Receivable module.

    • Discount taken account

      You can define a Discount taken account for each Accounts Payable branch or a single Discount taken account for the company.

  3. General Ledger Integration

    1. Navigate to the General Ledger tab and indicate the following:

      • the integration level you require for Accounts Payable
      • the level of automation for creating and posting General Ledger journals for Accounts Payable.
      • the point at which you want to force entry of analysis information, if you are using the General Ledger analysis facility
    2. Navigate to the Payables tab and define the General Ledger control accounts for Accounts Payable.

    3. Select the Maintain Branches function.

      Using the AP Branch Maintenance program, define your Accounts Payable branch(es). These are used to integrate the Accounts Payable module to the General Ledger.

    4. Select the Maintain Tax Codes function.

      Using the Browse on Tax Codes program, define the tax codes you require for the Accounts Payable module.

      This step is required if you want to create tax entries for transactions processed in the AP Invoice Posting program.

      See also Accounts Payable Tax.

    5. Optionally select the Maintain Banks function to use the Banks program to define a specific bank or banks from which you will pay your suppliers.

      This is only required if the bank has not yet been defined.

      If you want to process transactions for foreign currency suppliers, you need to define the Exchange variance account against the bank.

    6. Select the Maintain Variance Interfaces function

      Using the AP Currency Variance GL Interface program, define the interface ledger accounts by branch and optionally by currency/bank for the revaluation of outstanding foreign currency supplier invoices using the AP Exchange Rate Revaluation program. This only applies if you have foreign currency suppliers.

  4. Accounts Payable Setup

    Proceed through each tab and define the Accounts Payable Setup options you require.

  5. Cash Book Setup

    If you want to process transactions for foreign currency suppliers, you need to select the option: Foreign currency cash book required (General tab).

    This allows you to keep your cash book in the local currency and post foreign currency transactions to it. The transactions are converted into the local currency when they are posted into the cash book.

  6. Use the Browse on Purchase Order Discounts program to define the order discount codes you require for your suppliers.
  7. Use the AP Invoice Terms program to define the invoice terms required by your suppliers.

  8. If you selected the option: EC VAT system required (Tax Options - General tab), then you need to:

  9. Optionally select the Currencies program to define the exchange rates required for your Accounts Payable module.

    This step is required if you want to process transactions for foreign currency suppliers.

  10. Use the AP Check Format program to define the stationery formats required for the printing of checks and remittance advices.

    This step is required if you want to print checks/cheques and/or remittances for invoices that have been paid using the Payment Processing procedures.

  11. Use the Supplier Maintenance program to take on the details of your suppliers.

  12. You can use the AP List of Suppliers program to print the information for the suppliers you took on to check this information for accuracy.

    Alternatively, you can use the Create Report program to define your own report to print and verify the information you added for your suppliers.

  13. If you set the setup option:Supplier amendment journals required to Yes or Yes, including additions (Accounts Payable Setup - General tab), then you can use the Supplier Amendment Journal program to print the Amendment Journals as a record of any maintenance performed using the Supplier Maintenance program.

  14. Use the AP Initial Invoice Capture program to take on historical information from your previous system.

    None of the entries made using the AP Initial Invoice Capture program are posted to the Accounts Payable Tax files or to the General Ledger module. The supplier's account balance is, however, updated.

  15. Generate the AP Trial Balance report to check that the historical information you captured is correct for each supplier and that the report total matches your current Accounts Payable control account balance in your General Ledger.

    Retain the report for your auditors.

  16. Optionally use the Browse on AP Permanent Entries program to define permanent entries that you want to post to suppliers on a recurring basis.

  17. Optionally use the AP Label Format program to define the stationery format required for printing supplier labels.

    This step is required if you want to print supplier labels using the AP Label Print program.

  18. If your nationality code is set to USA (Company Maintenance - General tab - Edit Nationality Code function), then you use the AP 1099 Label Format program to define your page layout for printing 1099 supplier labels.

Accounts Payable Tax

The Accounts Payable module contains a single level tax system that allows you to apportion the tax amounts from an invoice for local currency suppliers. This type of system is required in a value-added type of tax system, where the amount of tax paid is potentially refundable from the government.

The amount of applicable tax is determined by tax codes to which various tax rates have been assigned (see Browse on Tax Codes).

Tax amounts relating to supplier documents are apportioned at the time you distribute the invoice in the AP Invoice Posting program.

Tax amounts relating to settlement discounts are apportioned at the time you record a manual check using the AP Manual Check Payment program, and when you release system checks using the Payment Cycle Maintenance program.

The Accounts Payable module provides you with a detailed tax report that you can use to support the amount of tax being claimed back from the government. Depending on the tax system you are using, you can use the following reports:

You can use the following sequence of steps to define the tax options/requirements for your Accounts payable module:

[Note]
  • You use the Tax Options program to define the tax system and the related tax options you require for your company.
  • You use the General Ledger Codes program to define the General Ledger codes to which you want to distribute tax amounts.

  1. Define the tax codes you are going to be using. Depending on the tax system you are using, you use the following programs to define tax codes:

  2. Optionally define the historical tax rates for the tax codes you defined (Tax Effective Rates or Extended Tax History Maintenance for tax codes in the USA tax system).

  3. Indicate the following General Ledger control accounts on the Payables tab of the General Ledger Integration program:

    • Input tax
    • Settlement discount (tax)
    • EC VAT on acquisition (if you are using the EC VAT system)

    • Withholding tax (if you are using the Withholding tax system)

    • Default QST (if you are using Second tier tax)

    • Settlement discount QST (if you are using Second tier tax)

  4. Indicate the method of tax distribution of invoicing (Accounts Payable Setup - Tax tab).

    Select Detail if you require tax entries to be created for all transactions that are processed in the Invoice Posting program (i.e. a breakdown of each tax code entered, summarized at invoice level).

    Select Summary if you require tax entries to be created and summarized for each journal processed in the AP Invoice Posting program (i.e. a tax amount for each tax code entered during one run of the program).

  5. Indicate the method of tax distribution for disbursements (Accounts Payable Setup - Tax tab).

    Select Disburse tax amount over multiple G/L tax accounts if you want the total tax amount entered during AP Invoice Posting to distributed to the A/P tax ledger code defined against each of the tax codes that you will be using.

    Select Disburse tax amount over single G/L tax account if you want the total tax amount entered during AP Invoice Posting to be distributed to the Accounts Payable Input tax account.

  6. Indicate the AP tax ledger account (Tax Options) to which you want to post tax amounts, if you are distributing tax over multiple General Ledger tax accounts.

  7. If you have indicated that a Global tax file is required (General Ledger Setup - General tab), or you have indicated that a Tax distribution file is required in Detail or Summary (Accounts Payable Setup - Tax tab), then during processing in the AP Invoice Posting program, you must indicate whether you want tax to be calculated exclusively or inclusively.

  8. Indicate the default tax code to be used during the expense distribution phase of the AP Invoice Posting program (Accounts Payable Setup - Tax tab).

    If you want the default tax code to be determined by the ledger code to which you are distributing the invoice amount, then assign a tax code to the ledger code using the General Ledger Codes program.

    If you do not want the ledger code to which you are distributing an amount to determine the default tax code, then enter a tax code at the Default tax code option (Accounts Payable Setup - Tax tab) and do not assign a tax code to the ledger account you will be using. You can still override the default tax code at the time of distributing the invoice amounts in the AP Invoice Posting program.

  9. If the EC VAT system is installed (Tax Options - General tab), then during processing in the AP Invoice Posting program, you must enter the supplier's EC VAT information. The nationality code that was assigned to the supplier (Supplier Maintenance) is displayed by default. The EC acquisition field can only be accessed if the nationality code assigned to the supplier indicates that the supplier is from an EC country and the VAT registration number is non-blank.

AP Invoice Processing

The following sequence of steps can be followed to process documents in the Accounts payable module:

  1. Manually match invoices received to purchase orders, delivery notes or packing slips and goods received notes to be used as the source document for posting supplier invoices.

  2. Post supplier invoices, credit notes and debit notes using the AP Invoice Posting program.

  3. Post adjustments against supplier invoices, credit notes and debit notes using the AP Invoice Posting program.

  4. If permanent entries are defined, then post permanent entries to create an invoice against the supplier using the AP Permanent Entries Posting program.

  5. Print the AP Invoice Journal Report as an audit trail of the documents you processed.

  6. Match the invoice numbers and amounts on the source documents to the amounts on the journal report.

  7. Review the journal report to ensure that the permanent entries have been posted correctly.

  8. If you are using the Invoice Registration facility, then:

    1. register invoices received for the first time from suppliers, using the AP Invoice Registration program.

    2. update unapproved registered invoices using the Change option of the Maintain Invoices function in the AP Registered Invoice Purge program.

    3. record the return of registered invoices to the supplier for corrections using the Return option of the Maintain Registered Invoices function in the AP Registered Invoice Purge program.

    4. record the return of an invoice from the supplier using the Reinstate option of the Maintain Registered Invoices function of the AP Registered Invoice Purge program. You must reinstate returned invoices before you can record the invoice as approved.

    5. cancel registered invoices that are not valid liabilities using the Cancel Invoice function of the AP Registered Invoice Purge program.

    6. record invoices that have been approved as valid liabilities using the Approve Invoice function of the AP Invoice Posting program.

    7. purge registered invoices that you have either cancelled or approved using the Purge Approved/Cancelled Invoices function of the AP Registered Invoice Purge program.

  9. If applicable, use the Customer - Supplier Contra program to selectively contra customer and supplier invoices and post the contra transactions.

AP Payment Processing

You use the Payment Cycle Maintenance program to create and maintain payment runs for processing payments to your suppliers.

The Payment Cycle Maintenance program enables you to create and run multiple payment runs simultaneously. Each payment run, however, is created for a single bank, currency and payment type.

This program controls the entire supplier payment cycle and enables you to:

  • generate a list of invoices that require payment
  • release invoices for payment
  • place invoices on hold to prevent payment
  • print a list of invoices released for payment
  • pay the invoices released for payment
  • print checks and/or remittance advices

  • process EFTs (Electronic Funds Transfers)

  • print and reprint payment registers
  • enter details of checks written manually to pay supplier invoices.
  • enter details of checks/EFT payments you want to void.

Pre-check run preparation

These two steps are not essential in the Accounts Payable module and should be run at the discretion of the user to produce increased efficiency.

  1. Print the AP Cash Requirements report. This enables management to forecast cash flow requirements and determine payment dates for the best utilisation of cash.

  2. Generate the AP Trial Balance in detail. This enables you to verify the accuracy of supplier accounts and invoices.

Accounts Payable Period End Processing

The following sections outline the procedures that you should follow to ensure that the integrity of the Accounts Payable system is maintained.

Pre-month end reporting

  1. Ensure the daily procedures for Accounts Payable are complete.

  2. If you enabled the option: Permanent entries required (Accounts Payable Setup - General tab), then ensure you run the AP Permanent Entries Posting program before running the month end.

  3. If the option: Create GL journal is not selected for Accounts Payable (General Ledger Integration), then run the AP Invoice GL Integration and AP Payments GL Integration programs to ensure that all the General Ledger journals for transactions processed in the Accounts Payable module are created.

  4. If the option: Post GL journal is not selected for Accounts Payable (General Ledger Integration), then use the GL Journal Entry program to post the General Ledger journals for Accounts Payable into the General Ledger.

  5. Optionally reprint the AP Invoice Journal Report and AP Payment Register Reprint for the month for audit trail purposes.

  6. Optionally reprint the AP Invoice Expense Distribution and AP Invoice Disbursement Distribution reports for the month for audit trail purposes.

  7. Print an Accounts Payable balance report using the Balance function of the AP Period End program.

  8. Print a trial balance including all suppliers using the AP Trial Balance program.

  9. Check that the total Accounts Payable amount agrees with the sum of the Accounts Payable control accounts in the General Ledger.

    Ensure that the balance in the Accounts Payable control account(s) in the General Ledger balance to the total of the Accounts Payable Trial Balance report and to the A/P resulting balance total on the Accounts payable balance report.

    Resolve any discrepancies before continuing.

  10. Optionally print the following reports as required:

Month end close

[Note]

It is advisable to take a backup of your data before processing a Month end, a Year end, setting 1099 accumulated net payments to zero or performing a Purge.

After you have completed the pre-month end reporting process:

  1. Select the Month end only or Month end and purge option from the AP Period End program to close off the current Accounts Payable period and to enable you to process transactions for the following period.

  2. Indicate the After processing completed options you require.

  3. Select Start Processing.

  4. Check the final page of the report produced to ensure that the month end was completed without errors.

  5. Print the Purchase Analysis History report if required.

  6. Run the At a Glance - Accounts Payable program and check the Posting Information to verify that the month number now reflects the new month.

Reconciliation to General Ledger

The balance in the Accounts Payable control account(s) in the General Ledger should balance to the total of the Accounts Payable Trial Balance report and to the A/P resulting balance total on the Accounts payable balance report (AP Period End).

You can use the table below to assist you in balancing the total Accounts Payable amount (from the Accounts Payable module) to the sum of the Accounts Payable control accounts in the General Ledger.

Report Value Difference
A/P Trial Balance total    
A/P control for previous month    
G/L control account total for previous month    

It is assumed that you are using the multi-period accounting feature and that at the time you want to reconcile the two modules (as of the end of a month) you are already posting amounts into the next month.

Based on this assumption, you want to:

  • print an Accounts Payable trial balance as of the previous month end
  • use the Accounts Payable control total as of the previous month end
  • use the sum of the Accounts Payable control accounts in the General Ledger.

Enter these three numbers in the left hand column of the table, and any differences between these numbers in the right hand column.

The only differences should be as a result of transactions not being posted to the General Ledger, or posting transactions through to the General Ledger in a different period to that which they were posted to in the Accounts Payable module.

If these are not the only differences, then:

  • Check that all journals were created and posted into the General Ledger.

    • If the option: Create GL journal is not selected for Accounts Payable (General Ledger Integration), then run the AP Invoice GL Integration and AP Payments GL Integration programs to ensure that all the ledger journals for transactions processed in the Accounts Payable module are created.
    • If the option: Post GL journal is not selected for Accounts Payable (General Ledger Integration), then use the GL Journal Entry program to post the Accounts Payable journals into the General Ledger.
    • You can use the GL Journal Entry program to generate a report of Accounts Payable sub module journals not yet posted or on hold.
    • You can use the AP Journal Report together with the AP Invoice Expenses Distribution Report to assist you in identifying the Credit entries in the General Ledger control accounts. Similarly, you can use the AP Payments Register and the AP Invoice Disbursement Distribution reports to identify the Debit entries.

  • Check that no journals other than journals from sub-modules were posted into the Accounts Payable control account(s) in your General Ledger. You can generate a detailed Trial Balance report (GL Trial Balance) of all the AP control accounts to assist you. Only journals with a source type of AP should appear in these control accounts. If transactions for any other types of source codes exist, then these must be identified and reversed if invalid.

Purge

You can purge (delete) detail transactions from Accounts Payable files when they are no longer needed as follows:

[Note]

It is advisable to take a backup of your data before processing a Purge.

  1. Select the Purge only function from the AP Period End program.

  2. Check the Purge details section of the AP Period End program to verify that these are the details you want to delete.

  3. Indicate the After processing completed options you require.

  4. Select Start Processing.

  5. Reindex the Accounts Payable module files using the Reindex Data Files program.

Year end

The year end procedure is similar to the month end procedure except that it can only be processed in the final accounting period of your financial year. The year end process transfers current year information to previous year and sets the current year-to-date information to zero.

  1. Ensure that the pre-month end reporting procedure is completed.

  2. Select the Year end function of the AP Period End program to close off the final Accounts Payable period of the financial year and to enable you to process transactions for the first period of the following financial year.

  3. Indicate the After processing completed options you require.

  4. Select Start Processing.

  5. Check the final page of the report produced to ensure that the month end was completed without errors.

  6. Run the At a Glance - Accounts Payable program and check the Posting Information to verify that the month number now reflects the first month of your new financial year.

Balancing

Balancing totals and audit trails are provided throughout the system.

The following programs may be run at any time to facilitate balancing and ensure account and invoice accuracy.

  1. Select the Balance function of the AP Period End program.

    This function verifies the Accounts Payable company balance to ensure account and invoice accuracy, and produces month-to-date totals of invoices, credit memo, debit memos and adjustments.

  2. Print an Accounts Payable trial balance using the AP Trial Balance program to compare the balance with total on the AP Period End report.

Integration to General Ledger and Cash Book

You define Accounts Payable integration to General Ledger using the General Ledger Integration program.

You define Accounts Payable integration to Cash Book using the Integration tab of the Accounts Payable Setup program.

Integration to Cash Book

If you require Accounts Payable payments to be linked to Cash Book (Accounts Payable Setup) then at the end of the Payment Register run, all checks (excluding void checks) are posted into Cash Book as withdrawals.

  • Only one journal entry per check number is made into the Cash Book module.

  • Because the Payment Cycle Maintenance program does not post payments into Cash Book if the check number is blank, you must run the AP Check and Remittance Print program before printing the Payment Register.

  • Once checks have been printed on the Payment Register and posted to Cash Book, you will be unable to reprint them.

  • The Payment Register prints the Cash Book Journal number at the end of the report.

  • A net local currency value is printed in the section headed Register totals for foreign payments - the net local currency value at the payment rate.

    When a payment is made against a foreign invoice, the exchange rate applicable to the payment is the rate held against the invoice.

Troubleshooting

Following are some error messages you may receive when processing transactions using the Accounts Payable module:

Message Description
Check are in progress for this bank. Program cancelled This indicates that on-line checks are in progress for this bank, with another operator.

The message will be displayed under the following scenario:

If one operator is printing Cash Book On-line checks, and a second operator tries to print A/P Checks against the same bank.
Checks - File in Use This indicates that checks are in progress for this bank, with another operator.

The message will be displayed under the following scenario:

If one operator is printing A/P Checks, and a second operator tries to print A/P Checks against the same bank.
Next payment date not greater than current payment date The Next payment date has to be greater than the current payment date.

Change the next payment date to reflect the next date on which payments will be made.
No invoices were found with due date before next payment date for this supplier No invoices are due to be paid before the date that you selected in the Next payment date field.
No invoices have been scheduled for release. Do you wish to process invoices manually? You must either select invoices manually to release them for payment or you must run the AP Release Schedule to generate an automatic list of invoices to release.
Not all checks have been printed. Program cancelled This message is displayed if you try to run the Payment Cycle Maintenance, when outstanding checks have been scheduled to be printed in the Payment Cycle Maintenance program.
Payment register is not yet printed. Program cancelled You cannot run the Payment Cycle Maintenance if you have not run the Payment Cycle Maintenance yet.
Remove the void status and reinstate this check? The invoice you selected has a void check status.

Select yes if you want to reinstate the check.
The ledger code for settlement discount is blank. Use the 'G/L Integration' program within 'Setup' to define the ledger code required You must define a settlement discount ledger code
The ledger code for withholding tax is blank. Use the 'G/L Integration' program within 'Setup' to define the ledger code required You must define a ledger code for withholding tax (General Ledger Integration - Payables tab).
The next payment date must be after the current payment date The Next payment date has to be greater than the current payment date.

Change the next payment date to reflect the next date on which payments will be made.
The total of the selected invoices equals the check amount. Do you wish to void this check and reinstate the selected invoices?

You selected to reinstate an invoice that did not exist in the system anymore.

The reinstated invoice amount equals that of the check that you entered to void. If you continue, then the invoice details are reinstated and the check is voided.
You may not apply these payments as the total of the selected invoices is negative

The total amount of selected invoices is a negative or zero value and you cannot apply payments to it.

Select the correct invoices until the value is greater than zero.
You may not apply these payments as the total of the selected invoices is zero The total amount of selected invoices is a negative or zero value and you cannot apply payments to it.

Select the correct invoices until the value is greater than zero.
You must select at least one of the invoice types before you can process invoices You have to select one or more of the following invoice types to process:

Past due, Due or Discountable.
Checks have not yet been printed. Program cancelled This message is displayed if you try to run the Payment Cycle Maintenance, when outstanding checks have been scheduled to be printed in the Payment Cycle Maintenance program.

Run the Checks and print all checks before you run the Payment Cycle Maintenance.