Payables Management Using Great Plains Brought to you by… Team #1

What is Payables Management?  The paying of goods, supplies, or services  Approving vendor invoices for payment  Monitoring and evaluating efficiency and effectiveness through access to detailed information in inquires and reports

The Big Picture!

What Payables Management Covers  Setup and Cards for Vendors  Transactions  Inquiries and Reports  Utilities and Routines

Using the Setup Routine  We begin by setting up defaults for Payables Management. (Tools>Routines>Purchasing> Checklist) Checklist)

Proceed to the Setup option under Frequency: In the scroll down box by frequency select setup

Payables Management Setup Screen

Aging Periods  Aging is the process of determining how long you’ve owed money to specific vendors  Due Date  The date that the vendor has set for payment  Document Date  The date the invoice was written

Choose an Aging Period

Apply Options  You can apply credit by one of two ways  Document Date  Due Date

Choose your applying process

Enter in Default Information

Enter passwords for security purposes

Defaults  Summary Review  Select a summary view to be the default view in the Yearly Vendor Summary (amounts since last close, fiscal year, calendar year)  Checkbook ID  Specify the checkbook that you use most often to pay vendors. If you haven’t opened a banking account now would be a good time.

Defaults Cont.  Check Format  Select a default check stub, decide what information you want on your check stubs  List Documents on Remittance  Choose what information you want as default for the Remittance. A remittance contains the same information as a check stub, only it is written on blank paper. (invoices only, all documents, applied orders, totals only)

Options  Override Voucher Number at Transaction Entry  Gives you the option of changing default voucher number when entering a transaction.  Track Discounts Available in GL  Gives you the option of setting up a separate General Ledger account for discounts given by vendors.  Print Historical Aged Trial Balance  If you mark this option, Great Plains keeps the transaction history necessary to print the Historical Aged Trial Balance.  Delete Unposted Printed Documents  Lets you delete an unposted printed document from the payables transaction window.  Age Unapplied Credit Amounts  If you age documents by due date and you mark this option, the due date for credit documents will be the same as the document date.

Vendor Classes Setting up Vendor Classes is a way to group vendors according to common entries.

Why use a Vendor Class?  Creating a class will make it easier to setup individual vendors by designating defaults for that specified class.  You can also make changes to groups of vendors quickly by changing the class record and rolling down the change to all vendors in that class.

We will use our company Superior Painting as an example  Lets assume we have multiple Paint suppliers and we want to group them under a certain class, “PAINT.”

Vendor Class Setup Tools>Setup>Purchasing>Vendor Class

Vendor Class Setup Screen

 Currency ID – choose a currency that you will be using in transaction with those vendors. (You must set up your currency first to enter in a default)  Rate Type ID - choose whether the majority of your transactions will be buying selling, or both.  Payment Terms – select the terms in which you will be paying this vendor.

Setting up Default Account for Vendor Classes  After entering in the options it is time to determine how you will be recording different transaction with these vendors.  On the bottom right of the setup screen click on the Accounts button.

Enter Account Setup Here

Setting up vendor class default posting accounts

What if we want to track two departments who order from the same vendor?  Lets assume Superior Painting had two department, North County Superior Painting and South County Superior Painting, and they purchase paint from the same vendor.  We can enter multiple purchase accounts to use during transaction entry when we distribute amounts to posting accounts.

Setting up vendor class default posting accounts Click here to setup Multiple departments For purchases Posting accounts

** Keep in mind that you will need to setup the accounts before you can enter them in as defaults

Vendor Cards  Now that we have setup our Vendor Class we can begin entering in individual vendors to that class.

Vendor Cards Cards>Purchasing>Vendor

Entering Vendor Information

Select the Class ID that you would like this vendor to be under Click here!

Transactions Invoices, credit memos, returns Finance charges, miscellaneous charges

Batches  A group of transactions that you use just one time, or recurring batches for transactions you enter on a regular basis.

Creating A Batch 1.Transactions>> Purchasing>> Batches 2.Enter a batch ID 3.Select batch origin 4.Enter comment 5.Select frequency 6.Enter number of times to repeat posting in the recurring posting field 7.Enter posting date 8.Enter checkbook ID 9.Enter batch total

Entering An Invoice Transactions>> Purchasing>> Transaction Entry

Entering an Invoice

Entering Credit Memos & Returns  During the course of doing business, you might return merchandise or receive credit.  For example, assume that the fabric for the new line of cozy doggy sweaters was defective and needs to be returned.  You must record the return as credit memo or as a return.  A credit memo reduces the amount you owe a vendor.

To enter a credit memo or return 1.Transactions>> Purchasing>> Transaction Entry 2.Select Credit or Return as document type and enter a description 3.Enter voucher #, Vendor ID, Date, Document Number 4.Enter credit memo or return amount 5.Apply

Finance or Miscellaneous Charges  To enter a finance or miscellaneous charge, you follow the same steps as entering an invoice or return but select Finance Charge or Miscellaneous Charge as the documentary type.  A finance charge is the cost of borrowing money or a fee for not making payments on time.  Examples of miscellaneous charges are service charges such as installation or repairs of merchandise.  For example, if Extreme Mountain Vehicle was on a leasing agreement with the SUV’s they used and were late with a monthly payment, you would track the extra expense as a finance charge.

Paying An Invoice BY CHECK: 1.Enter amount you’re paying 2.Choose checkbook 3.Enter date and payment number 4.Enter check number and mark print to print a check.

 A manual payment is when you haven’t received the merchandise and an invoice has not been recorded. A manual payment can be paid by cash, check or charge.

Scheduled Payments  When you make large purchases from vendors or make purchases that are delivered over time, you might want to spread payments out.  For example, if Kabobby’s purchased the newest, state-of-the-art grill for their restaurant they would have a large payment and would use a scheduled payment to pay off the equipment.

Creating A Payment Schedule 1.Transaction>> Purchasing>> Scheduled Payments 2. Enter schedule number, description, vendor ID. 3. Choose either compound or simple interest type 4.Enter scheduled interest rate and number of payments and frequency. 5.Calculate