Entering Payables into On-site System
Setting Up Vendors for Payables
Covers setting up vendors for payables, including how to create vendors, define payment terms, and configure them so that the correct information transfers when creating payables. Critical configurations ensure accurate financial tracking and reporting.
Explains how to enter payables into the On-site system, detailing each field and its impact on accounting.
Details how to enter vendor credit memos, manage their application, and reconcile them with outstanding payables.
Accessing Payables Section
Navigate to the accounting section within the On-site system. This section is the hub for all financial transactions related to vendor payments.
Select 'payables' to access the payables functions. This area allows for managing, viewing, and processing vendor invoices and payments.
Overview of Payables Section
Ability to view all or any unpaid bills, providing a comprehensive view of outstanding liabilities.
'View All Unpaid' displays open payables, which are crucial for cash flow management and payment scheduling.
'View All' shows all payables ever created in the system, useful for auditing and historical analysis.
Payable information includes dates (entered, due, paid), internal PO number, payable ID, vendor invoice number, vendor, payable amount, discount, total paid, balance due, hold status, partial payment status, paid status, and PO match status.
Dates: Date entered, due date, date paid. These dates are essential for tracking payment timelines and identifying overdue invoices.
Internal PO Number: Shopworks' internal purchase order number. This links the payable to the originating purchase for reconciliation.
Payable ID: Unique identification number for each payable, ensuring accurate tracking and referencing.
Vendor Invoice Number: The invoice number provided by the vendor. This is critical for matching the payable with the vendor's records.
Payable Amount: Total amount of the payable before any discounts or payments.
Discount: Any discounts applied to the payable, such as early payment discounts.
Total Amount Paid: Total amount that has been paid towards the payable.
Balance Due: Remaining balance on the payable after deducting payments and discounts.
On Hold: Indicates if the payable is on hold, preventing payment until the hold is removed. This is often used for disputed invoices.
Partially Paid: Indicates if the payable has been partially paid, showing that installments are being used.
Paid Status: Green checkbox indicates the payable is paid in full.
PO Match Status: Blue indicates no PO, green indicates a match, and red indicates a mismatch. This highlights discrepancies between payables and purchase orders.
Summary provides grand totals of payables and open amounts, offering a snapshot of total liabilities.
Aging shows a listing for aging - the amount due and what bucket it falls into as far as overdue. Aging is crucial for assessing financial health and managing payment schedules.
Aging categories: 1-30 days, 31-60 days, 61-90 days, 90+ days overdue. These categories help prioritize payments and identify potential issues.
Reconcile tab shows payable versus PO amount and whether they match, as well as any difference. This is vital for verifying the accuracy of payables against purchase orders.
Dates tab shows a listing of different dates, which location the payable was for, the internal purchase order number, the vendor's invoice number, the payable amount, and the balance. Useful filtering for specific payables.
Fines allow searching for specific vendors, amounts, purchase orders, or payable IDs. Efficiently find invoices.
Print and export options for reports (payable detail, aging detail, reconciled information, aging summary) in various formats (paper, preview, PDF, Excel, etc.). Customizable reports for financial analysis and record-keeping.
Payable Actions
Create a new payable, initiating the process of recording a vendor invoice.
Pay bills (covered in a separate video). Streamlines the payment process.
Bulk print checks for bills (covered in paying bills video). Enhances efficiency when processing multiple payments.
Manually update aging (automatic updates occur daily). Allows for corrections and adjustments.
Aging options: due date (includes vendor terms) and payable/invoice date (based on the entry date).
Vendor Setup
Need to look at vendors and vendor setup. Correct vendor setup is critical to accurate payables.
The vendor has to exist in our vendor section to create the payable. Pre-existing vendors in the system.
Vendor Information
Most important for this video is the payable setup. This ensures accurate processing.
Default terms are selected and an account that will be utilized when the payable is created. Streamlines payables creation.
Always need a default account for the vendor to exit the vendor setup. This provides a baseline for accounting entries.
Accounts come from the chart of accounts. Integrate financial records.
Creating a Payable for a Utility Company
Go to accounting and then add payable. Step-by-step process to add payables.
Pick the particular vendor, and it automatically populates the amount due and terms and also a due date. Increases accuracy.
Click on default to automatically populate the general ledger entries and pick the selected account for that vendor, in this case, rental company. Reduces chances for manual errors.
An amount can be set up within the vendor so that whenever the payable is created, it will automatically fill in the amount. Streamlines recurring payables.
If there is no PO in the system for this particular vendor, then nothing needs to be entered in the PO number. Simplifies non-PO invoices.
Click done, and the payable is now an open payable that needs to be paid in the future. Standard process.
Creating a Payable for a Garment Vendor
Select SanMar, as an example. Illustrates setting up payables for garment vendors.
Again, focus is on the payable setup. This ensures accounting accuracy.
The vendor information is in a separate video. Related to general vendor management.
Payable Setup
Default terms are already selected. Standard supplier agreement.
A discount amount may be listed, (if there is a discount for paying bills early for a particular vendor), and the percentage or amount needs to be put in.
E.g., 2% discount represented as 0.02. Apply discounts.
The default account should be an inventory account. Inventory work in progress. Tracks inventory-related payables.
The reason to have a separate inventory work in progress account has to do with how the sales order captures costs the job. The payable does not.
The payable is actually going to be related to what we call work in progress inventory. Crucial for tracking what you have.
Secondary default account can be set up for freight. Capture costs of shipping.
The rule of thumb will be that, if the vendor that you are creating a payable for is a vendor where you sell their items to a customer, then use the inventory work in progress account. Correct accounting practices.
Capture what the vendor charges for freight separately than the goods that are getting bought from that vendor. Keeps separate costs.
Capture shipping cost from the purchase order that was put into the system. Helps overall job costing.
Adding a New Payable for Garment Vendor
Go to accounting, add a new payable, and pick the vendor. Follow process exactly.
Enter a purchase order number that is coming from purchasing in the on-site system. Links to your system.
The purchase order number comes up in red, shows the vendor, and has the ability to view the PO. Helps with quick matching.
The difference is displayed at the bottom. Reviewing difference.
The bill is , but the purchase order is only . The difference of is for the shipping account. Explains accounting discrepancy.
Enter the amount for PO shipping, and the status turns green. Shows that everything is properly validated.
Enter the invoice number from SanMar. Invoice number validation.
Click default for the general ledger, and it automatically fills in the correct amounts to the correct accounts. Automation reducing errors
To view the purchase order, click on view PO, which will take you to the purchasing section and the specific purchase order. Cross-reference in system.
Make sure that the dollar values for the goods are accurate because if they are not, then costing for the sales orders may not be accurate, and thus it would throw off your job costing. Critical for financial accuracy.
Vendor Credit Memo
Occurs when you have overpaid a particular payable and you have a credit to use towards a future payable. Managing credit.
Go to add payable. Follow steps.
Pick the vendor. Select vendor name.
Choose credit memo to the right in the change payable type. Select function.
Put in a negative amount. Value represents the credit.
Hit default, and it's going to reverse out or default to the exact same accounts that are used for that particular vendor. Ensure accurate record.
When you go to view all unpaid, now there's a vendor credit memo in there that can be used towards a future payable when you go to pay bills. Track status in Onsite system.
Procedural Considerations
Determine which employees will need access to enter or view payables in the onsite system. Sets permissions.
If payables are being created for POs, ensure they match the purchase order. If the PO does not match, that needs to be viewed or reconciled prior to paying that bill. Matching payables with vendors.
If they do not match and you just kinda move forward with the with the with the procedure, what can happen is that it can cause errors in your general ledger down the road meaning that your costing could then become off and your inventory work in progress account could become off if they don't match. Warning for potential errors.
Ensure accurate unit costs and shipping information during purchasing. Accurate records
Shopworkshelp.com is available for any questions. For any further questions