Accounts Payable Process

Landed Cost Allocation

Depending on your company's policies and procedures, this step may or may not be necessary, or it may be optional as part of this process.

If your company does expenses all indirect costs, this step will be fully skipped. If your company does landed costing, this step may be completed at the end of the purchasing process, again, depending on your own policies and procedures. If your company does use this step, it must be completed prior to the next step in this process.

Vendor Invoices

This is a mandatory step in the accounts payable process. In this area, you will record invoices sent to you by your vendors. You can record any expenses (such as freight or surcharges), match receipt lines to the invoice, and supply actual costs to any landed costing elements that may have been captured in the previous step.

In addition to the vendor invoice process itself, there are two other functions that create a vendor invoice:

Vendor Drop Ship Confirmation

This process is used when a sales order has spawned a vendor drop ship order. Once the goods have been shipped or delivered to your customer, you use this process to record the shipment. At the end of this process, two documents are produced: a sales invoice and a vendor invoice. Thus, this process is an alternate way in which a vendor invoice can be created.

Recurring Vendor Invoice Release

This process creates a predetermined vendor invoice on a regular schedule. This type of recurring invoice may be used to record payables such as monthly rent. At the end of this process, a vendor invoice is created.

Vendor Payments

Once you have completed your vendor invoice, it must be paid. You can accomplish this via two different methods:

Pay a Vendor

One option is to use the Pay a Vendor function. This screen is suitable for instances in which you want to pay a specific vendor or a specific invoice. If you have received a reminder from your vendor, you may want to simply enter this area to pay your full balance, pay a specific invoice, or pay a specific set of invoices. This area allows you to focus on this one particular vendor and take care of that vendor's invoices.

Pay Vendors

Another option is to use the Pay Vendors function. In this area, you can specify certain criteria to find all of the invoice that need to be paid, regardless of vendor. This area can be useful when you just want to pay all invoices that are due within the next few days, or if you want to pay any invoice that has a terms discount prior to the expiration of the discount date. This area has all of the functionality as the Pay a Vendor function, it simply allows you to pay multiple vendors at once.

Bank Withdrawal

This is a mandatory step. Once your invoice has been paid, you must actually issue the payment to the vendor. In this step, you identify the bank account that the funds will be withdrawn from and select the payments that have been entered in the previous step.

Once this step is completed, the invoice will be marked as "Paid" if it has no remaining balance. In this case, the accounts payable process is complete in regards to this invoice. If, however, the invoice still has a balance, the invoice will be marked as "Partially Paid" and the process starts over at the payment step.

Alternately, there are two functions that can also be used to end the process:

AP Adjustment

This process can be used to alter the balance of an open invoice. Thus, it can be used to complete the process and skip over the payment and withdrawal steps.

Unmatched Purchase Receipt Purge

This process can be used to purge receipt lines from the system that have not already been matched. Thus, this step can be used  to bypass the process entirely. If this process is used, there will be no items for the invoice to be created against.