Background: AP Invoice Entry
Use the AP Invoice Entry (NE) program to enter a batch of invoices (vendor vouchers) and print the AP Invoice Register for them and for system created fixed expense, sales commission, consignment inventory, return to vendor, and ERS vendor batches. See Road Map for work flow.
This topic has these subtopics:
Invoices to be Paid by Credit Card or Electronic Funds Transfer |
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Batch Processing
Batch processing allows multiple operators to enter and update invoices. However, the same batch can not be accessed by multiple screens. The program disables the Invoice and Delete buttons during the batch update process, or if there has been a system interruption.
Matching Invoices with POs
If you selected the AP interfaced to purchasing? option in the System Options Maintenance (XM) program (Accounts Payable Options), you can select receivers for invoicing in the AP Invoice Entry program. You need to select the Default to receiver lookup? Program option for AP Invoice Entry. Alternatively, your system administrator can set this option for all or for specific users of AP Invoice Entry with the User Options Maintenance (UOPT) program.
If you select Y Invoice is for a PO for the Type of invoice field when you enter the invoice, the program displays a list of receivers and line numbers with the associated PO and line number, item number, and PO amount. Selecting the receiver for this invoice saves you data entry.
If the invoice is not attached to a PO, you must enter distribution information, unless you assign an AP template to the vendor. The account type determines whether the posting is a credit or debit. Assets and expenses are debits; all others are credits.
Because the system links receivers, purchase orders, and invoices, you can easily track whether or not you have paid a purchase order.
Payment Addresses
By default, payments are directed to the remit-to address specified in the Vendor Maintenance (VM) program. If other payment addresses are required for a vendor, you can add them with the Alternate Remit-to Maintenance (VRM) program. During invoice entry an alternative remit-to can be selected. You can change the remit-to address of previously entered invoices with the AP Invoice Maintenance (NM) program.
Invoices to be Paid by Credit Card or Electronic Funds Transfer
If you regularly pay certain vendors with a credit card or electronic funds transfer, you should select the code for that method in the Payment method field of the vendor's record in the Vendor Maintenance (VM) program. If you want to pay a particular invoice with a credit card or electronic funds transfer, you can select that code for the Payment method field when you enter the invoice in AP Invoice Entry.
When you print the AP invoice register for a batch that contains invoices to be paid by credit card or electronic funds transfer, the program creates or updates a batch for that payment method in the Vendor Payments (NC) program.
To process credit card or electronic funds transfer payments, you run the Cash Requirements Report for the batch in the Vendor Payments program. After you run this report, the status of the batch is B. This status means you do not run the Check Print (NCP) program but must run the AP Payment Register (NCR) program.
Debit Memos
A debit memo increases your liability account and decreases your AP cash or asset account. You can apply a debit memo to an invoice that has been fully processed through the AP Invoice Register. After you run the AP Invoice Register for the debit memo, the Amount due that the Vendor Payments (NC) program displays includes the debit memo.
If you do not know the invoice number, you can enter ON-ACCT. You can subsequently apply the debit memo to a specific invoice with either the Vendor Payments (NC) or On-Account Payments Application (NMO) program. If you enter more than one ON-ACCT debit memo per vendor, the system accumulates the amounts.
Credit Memos & Invoice Reversals
A credit memo decreases your liability account and increases your AP cash or asset account. The account type determines whether the posting is a credit or debit. Assets and expenses are debits; all others are credits.
A Credit memo can be standalone (i.e., a unique invoice number is assigned) or it may be applied to an existing invoice (billing invoice, fixed expense).
You can apply a credit memo to an invoice that has been fully processed through the AP invoice register. When a CM transaction type is entered for an existing invoice, you can indicate that it is a reversal. The system displays the header and distribution lines from the original invoice. You can modify the reference field on the header, but you cannot change, add or delete distribution lines. After you run the AP Invoice Register, the invoice nets to zero (i.e., it may not show on the AP trial balance unless you include zero-balance invoices, and any receiver lines invoiced are re-opened (they will show again in the receiver selection when an invoice for this vendor is entered).
If the CM is not a reversal, the system assumes a partial credit is being issued and you must enter amounts and distribution. After you run the AP invoice register for a partial credit, the amount due that the Vendor Payments (NC) program displays reflects the credit. There are no adjustments to the receivers; i.e., they are still marked as fully invoiced if the original invoice was for the full quantity received.
If you do not know the invoice number, you can enter ON-ACCT. You can subsequently apply the credit memo to a specific invoice with either the Vendor Invoice Payments (NC) or On-Account Payments Application (NMO) program. If you enter more than one ON-ACCT credit memo per vendor, the system accumulates the amounts.
Cost Updating and Variance
If you selected the Update average/actual costs? option in the System Options Maintenance (XM) program (Inventory Control Options), the system updates the actual cost of purchased items, using the PO cost when you receive them. If you also selected the AP interfaced to purchasing? option (Accounts Payable Options), the AP Invoice Register updates the actual cost when the invoice cost differs.
The system calculates the variance: ((Quantity paid x PO cost) + Surcharges) - Invoice cost. The program can prevent you from processing an invoice if the difference between an item's invoice and PO cost exceeds the percent entered for the AP/Purchasing variance % option in the System Options Maintenance (XM) program (Accounts Payable Options).
If you change purchase order costs to eliminate the variance and the variance flag is set, the system recalculates the variance when the invoice prints and updates.
Manufacturing Order Cost Updating
Usually the system updates manufacturing order costs based on work in process, routings, and receiving. If a purchase order references a manufacturing order number, the system updates the manufacturing order cost based on the PO cost.
If the invoice cost differs, the system updates the actual cost even though you do not enter the manufacturing order number. When you enter the invoice, you match it with the receiver, which is tied to the PO, and the PO is tied to the manufacturing order.
In rare cases, you may need to enter an invoice that references a manufacturing order so that the system can add the invoiced amount as an adjustment to the cost of the manufacturing order. Typically this is for a special purchase, and the cost on the purchase order is zero because the purchasing agent did not enter a unit cost. The system classifies the adjustment as purchased material, labor, outside service, or miscellaneous based on the Adjust code you select.
You must select the AP interfaced to purchasing? option in the System Options Maintenance (XM) program (Accounts Payable Options) if you want to tie invoiced costs to manufacturing order costs.
Surcharges
If your vendors add energy and other surcharges to your invoices, you can have the system add estimated surcharge amounts to your purchase orders. Purchasing can enter up to four surcharges per an item and vendor in the Vendor Price Maintenance (VMM) program.
The AP Invoice Entry program displays the calculated surcharges for the purchase order line when you select the line in the Receiver Lookup. You can adjust the displayed surcharges, if necessary.
If you selected the Update average/actual costs? option in the System Options Maintenance (XM) program (Inventory Control Options) and purchasing selected the Include in actual? field for a surcharge, the system updates the item's actual cost when you run the AP Invoice Register.
You may need to enter surcharges for an item that does not have them set up in the Vendor Price Maintenance program. After you select the receiver and click Exit, select the receiver and click Surcharges. If you add surcharges, you must select the Include in actual? field to have them included in the item's actual cost when you run the AP Invoice Register.
If you frequently have surcharges, you need to make sure to set the AP/Purchasing variance % option in the System Options Maintenance (XM) program (Accounts Payable Options) high enough to allow for them.
Landed Costs
You can use AP Invoice Entry to enter an invoice from a landed cost vendor (freight company, customs broker, or insurance company). You specify invoice type is L (landed cost) and then select landed cost being invoiced.
When all landed costs associated with a receipt have been entered, Landed Cost Update is run used to update the item’s actual cost.
Drop Shipments
When your vendor ships an item directly to your customer, you do not have a receiver number match to the invoice. Therefore, you must enter the purchase order number in the Drop ship PO no field. When you run the AP Invoice Register, the system creates a shipment for the sales order, which allows Accounts Receivable to invoice the customer.
Foreign Currency Transactions
If you activated the multi-currency option during installation or database conversion, you can enter a vendor invoice in a currency that is different from your base currency. You must enter all amounts in this currency, including the transaction amount, discount, surcharges, all distribution line amounts, and total debits and credits.
The AP Invoice Register credits the Accounts Payable account and debits the AP Accrual account in the foreign currency. You may want to create separate accounts for each currency. Then in the Posting Criteria Maintenance (XPC) program you can set up AP and AP accrual postings by currency for the AP Invoice Register.
Note
Use Currency Codes Maintenance (TCU) to activate currency and set up codes.
Fixed Expenses
When you release fixed expenses with the Fixed Expenses Processing (NFP) program, the system creates a FXP batch of invoices. The system assigns the contract number entered in the Fixed Expense Maintenance (NFM) program plus a sequence number. Select the batch and view or print the AP Invoice Register.
If a fixed expense distribution is out of balance, the preview register prints a message to identify the out-of-balance fixed expense. Use the Fixed Expense Maintenance program to correct the out-of-balance condition before re-releasing the corrected fixed expense through the Fixed Expense Processing (NFP) program. After you print the final register, you are ready to process payments the fixed expenses.
Sales Commission Payments
If you selected A for Accounts Payable for the Upd commissions to A=AP, F=File, N=None option in the System Options Maintenance (XM) program (Sales Commission Options), the system creates a SLSCOMMnn batch that contains invoices for sales commission payments processed by the Sales Commission Processing (SCR) program. Invoice numbers are the sales rep's number plus the processing date in the format CCYYMMDD.
If the batch already exists, the system adds to it. Select the batch and view or print the preview AP Invoice Register. After you print the final register, you are ready to process payments to sales reps.
Consignment Inventory
If you accept components or raw material on consignment from an supplier, you do not pay the vendor until you consume the inventory. When manufacturing obligates or picks consignment inventory, the system creates a purchase order and an invoice for the vendor. The invoice has the same number as the PO.
The system creates a CONSIGNMT batch or adds to an existing CONSIGNMT batch. Select the batch and view or print the preview AP Invoice Register. After you print the final register, you are ready to process a payment for the vendor.
Return to Vendor and MRB Credit Memos
If you are using the Material Review Board for purchased items, the system can create an MRBCREDIT or RETPURCH batch.
An MRBCREDIT batch contains credit memos that the system generates when the user who runs the Rejected Material Disposition (MRB) program selects the vendor disposition C: No return to vendor; credit due. You and the vendor agree that the item has no value to either so there is no need to return it to the vendor. The credit memo the system creates is for the original purchase order number.
The RETPURCH batch contains credit memos that the system generates when
the vendor disposition is:
D: Return to vendor; credit due
E: Return to vendor for replacement; credit due
These credit memos have the same number as the purchase order the system
creates.
For each type of batch, select the batch and view or print the preview AP Invoice Register. After you print the final register, you can apply the credits to vendor invoices in the Vendor Payments (NC) program.
Proforma Batch
If you negotiated with a vendor not to send an invoice for items received, select the ERS vendor? in the vendor's record in the Vendor Maintenance (VM) program. The system selects ERS invoice? field on the purchase order in PO Maintenance (VOE) program for an Evaluated Receipt Settlement (ERS) vendor. When you receive this vendor's items, the system creates an invoice that has the same number as the PO in a PROFORMA batch. The invoice is for the quantity received at the purchase order price. After you print the final register, you are ready to process a payment for the vendor.
Preview and Final Register
The AP Invoice Register prints a list of the transactions that you entered in the AP Invoice Entry program. View or print the preview register to determine whether the entries are correct and balanced. Use the AP Invoice Entry program to make the necessary changes or deletions. You must print the AP Invoice Register every time you use the AP Invoice Entry program to change a vendor invoice. You cannot change or delete transactions in the AP Invoice Entry program after you print the final AP Invoice Register.
The AP Invoice Register updates year-to-date invoices in the Vendor Service Inquiry (VSI) program and the Curr AP Bal displayed when you click Acct info in the Vendor-AP History Inquiry (VMHQ) program.
When you run the AP Invoice Register, these documents print in this order:
Seq |
Document |
Comments |
1 |
Preview register |
Review to be sure that it is correct. |
2 |
Preview journal |
If these options are selected:
|
3 |
Final register |
If this option is selected:
|
4 |
Final journal |
If these options are selected:
|
The register includes this information:
Vendor number
Vendor name
Alternate remit-to number
Alternate remit-to name
Invoice number: For a CONSIGNMT batch, the invoice number is same as the PO number
Transaction code:
BF: Fixed billing, BI: Billing Invoice, CM: Credit Memo, DM: Debit MemoPayment method
Transaction date
Due date
Discount date
Discount percent
Discount amount
Transaction amount in the vendor's currency
Currency code
Reference for the invoice
1099 amount
Date posted
Sequence number
GL organization code
GL account number
Description of the transaction
Credits for the transaction
Debits for the transaction
Total debits and credits
Register totals:
Total number of transactions in this batch
Total amount due per currency and in all currencies
Total alternate payments per currency and in all currencies
Total eligible discounts per currency and in all currencies
Total debits
Total credits
General Ledger Postings
The GL organization and account that the AP Invoice Register uses depend on whether you selected one or both of these options in the System Options Maintenance (XM) program:
Inventory interfaced to GL? (Inventory Control Options)
AP interfaced to purchasing? (Accounts Payable Options)
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AP-Purchasing Interfaced |
AP-Purchasing NOT Interfaced |
IC-GL Interfaced |
The PO Receipt Register (VRJ) posts to the accounts specified in the Posting Criteria Maintenance (XPC) program and to an AP Accrual account. The AP Invoice Register backs out the AP Accrual account posting and posts any difference between standard cost and actual cost to a variance account. |
The AP Invoice Register posts to the organization and account entered in the Vendor Maintenance (VM) program. If neither was entered, you must enter the appropriate account to be expensed or the inventory account to be used on the PO line. |
IC-GL NOT Interfaced |
The AP Invoice Register posts to the accounts on the PO line and to the AP Accrual account. |
The AP Invoice Register posts to the organization and account entered in the Vendor Maintenance (VM) program. If neither was entered, you must enter the appropriate account to be expensed or the inventory account to be used on the PO line. |
If you selected the Inventory interfaced to GL? and the AP interfaced to purchasing? options in the System Options Maintenance (XM) program (Inventory Control Options and Accounts Payable Options), the system processes AP invoices for inventory items differently from non-inventory items.
When you receive the goods, the system credits an AP Accrual account, which you establish in the Posting Criteria Maintenance (XPC) program, with the cost of the item: Standard cost x Quantity received. When you invoice the goods, the system debits the same cost to the AP Accrual account and credits the invoice cost to the account with the AP posting name, which is also set up in the Posting Criteria Maintenance program.
For example, the receiving journals use the quantity received times the standard unit cost to debit the inventory account, which you specify in the Posting Criteria Maintenance (XPC) program, or the GL account specified on the PO line. The other side of the entry is to credit the AP Accrual account.
Inventory account |
200.00dr |
AP accrual |
200.00cr |
The AP Invoice Register calculates variance: (Quantity received x Standard unit cost) - Invoice cost. The quantity received is in stocking units of measure. When the costs are not the same, the register posts the difference to the inventory variance (INVTY VAR) account set up in the Posting Criteria Maintenance (XPC) program.
Using the above example, if you enter 220.00 in AP Invoice Entry as the invoice amount, the AP Invoice Register posts:
AP accrual |
200.00dr |
AP account |
220.00cr |
AP inventory variance |
20.00dr |
Program Options
You can set the program options from this program only if you have an existing batch. If you do not have a batch, your system administrator can run the User Options Maintenance (UOPT) program to set the options for you.
Audit Trail
To activate an audit trail, select one of the files listed below in the Audit Trail Maintenance (XAT) program. The system records all transactions. You can then run the Audit Trails (ATR) program and select that file to print a report of these transactions.
VP1B: Purchase Order Lines
O1SL: Shipment Lines