Accounts Payable Overview

The Accounts Payable (A/P) tracks what your organization owes vendors by entering invoice information. It allows you to

• Monitor when to pay vendors

• Write checks on demand

• Reconcile checks written on demand when you receive the bank statement

• Use an unlimited number of subsidiaries: a group of individual balances that tie down to one G/L account. The G/L serves as the control account and the subsidiary tracks the account detail.

Each vendor is assigned one or more accounts payable subsidiary. Every task in the A/P module centers on the need to record purchases and payments for subsidiary accounts.

The sum of the subsidiary balances equals the balance of the control account. The first step is to identify G/L accounts that will serve as subsidiary control accounts. Each control account will have a two-character subsidiary code as shown in the table below.  

Using these subsidiary control accounts, you can set up individual subsidiary accounts, which track the transactions and the balances of an individual or vendor. A vendor may have one subsidiary account for each control account.

To create a subsidiary account, you must create an AP Master row. The AP Master row is the portion of the subsidiary account that keeps track of the balances and must exist before you can create subsidiary transactions for a vendor.   

Creating a Subsidiary Account Example

The following are ways to record purchases that result in invoice transactions:

• Invoices. The Invoice window allows you to record purchases or credits from vendors. Invoices and credits can take several forms: regular checks, immediate checks, manual checks, void checks, and vendor refunds.

• Manual Transactions. You always have the option to enter manual charges and adjustments to a subsidiary account. These transactions are typically journal entries (source code = JL ).

• Regular Payments. You may have the system generate checks automatically for payments that are made at set intervals.

• Financial Aid. If your organization has purchased the PowerFAIDS Interface, certain awards may require that you print a check for the student as part of their aid package.

• A/R Refunds. If your organization has the Accounts Receivable module, the Accounts Receivable Office may ask you to produce refund checks for students who have a credit balance. You may designate the percentage that is to be refunded to the students.

• Purchasing Module. If your organization has the Purchasing module, purchase orders may be changed into invoices. This saves the A/P Office the time needed to enter the invoices.

• Fixed Assets. If your organization has the Fixed Assets module, assets created in the Accounts Payable module can be sent to the Fixed Assets module for review.

After the invoice transactions are created, you can print two reports that provide you with the status of your payable items in the system:

• The Cash Requirements Report lists each date on which an item is due. Within each date is a list of vendors and the amount due (gross amount - discount amount = net amount).

• The Unpaid Invoices by Vendor Report lists each vendor to whom you owe money. Within each vendor you see the pay date, the invoice number, and the amount due (gross amount - discount amount = net amount) for each item not yet paid.

The Checks to be Issued Report is the first step in printing checks. It selects which checks will be printed from the criteria you enter:

• Kind of checks you are printing (e.g., A/P, A/R, Financial Aid, or all three)

• Checks over or under a certain amount (optional)

• Subsidiary group from which checks are to be selected

• Payable date cutoff

• Beginning check number

• Date to be printed on the checks

• Secondary report title (optional)

The report also tests to see if you will receive vendor discounts based on their criteria, calculates each check amount, and lists information about each check to be printed.

As checks clear the bank, you can automatically reconcile them to the A/P module by ordering a tape (or other magnetic media) from your bank containing information about the cleared or paid checks. If you do not process the information automatically, you must enter the returned check information manually.