AP Document Controls
The procedures listed in this section are used when processing accounts payable invoices and credit memos which have not yet been paid.
1. Total the invoices which need to be posted. Collect the invoices and credit memos which have been verified and which need to be processed. Use an adding machine to produce a total and retain the tape for future reference. The adding machine batch total can be used to confirm that all invoice amounts were correctly entered into the system. This step is optional but provides some assurance that invoices are not being lost or mis-posted.
2. Determine the general ledger accounts, division and departments that each invoice should be applied to. Each accounts payable invoice or credit memo may be applied to only one division. All accounts payable invoices are posted to the accounts payable control account in department one of the division that the invoice is being posted to. A single invoice amount can be distributed, charged, or split between multiple general ledger accounts and departments as long as the accounts and departments exist in the division that the invoice is being posted to. You should identify the division, account(s) and department(s) that each invoice should be posted to prior to entering the invoice into the system and note this information on the invoice or on a separate posting document for the invoice. This procedure is not required as you may search for and select the appropriate general ledger accounts during invoice entry, but it significantly speeds up the invoice entry process.
3. Verify the system date and posting period. Confirm that the system date shows the current date and that the default general ledger period and year shown on the menu are correct. You should not post any accounts payable transactions unless the date, accounting period and accounting year shown on the menu are correct. If any of these values are incorrect, you should determine and correct the cause of the problem before continuing. Posting invoices to the wrong period or date or to prior accounting periods can vastly complicate the daily balancing and audit procedures and is strongly discouraged.
4. Enter the accounts payable invoices into the system. Select the Accounts Payable Invoice Entry program from the Accounts Payable Menu and process the invoices and credit memos. The invoice entry procedure creates a record in the Accounts Payable Register file (File 82) for each invoice entered into the system. The AP Register record includes detailed information about each invoice including the vendor, invoice amount, description, invoice date, due date, available discount, division, etc. The AP invoice entry process also creates journal entries to the accounts payable GL control account and to the other GL accounts that each invoice is charged to. If the invoice being processed is for an inventory receipt, the invoice is matched to the inventory receipts the invoice is for. As each AP Invoice is entered into the system, the Vendor record for the invoice vendor is updated with the current total AP open invoice balance for the vendor and other information. Note: The procedure for entering a credit memo is the same as that for entering an invoice except that a credit memo is entered as a negative amount (the amount of the invoice should be entered with a "-" preceding it). The operator should also precede the invoice amounts being allocated to the GL with a negative sign when a credit memo is processed.
5. Record the Register or Transaction number assigned to each invoice as it saved. Once the AP register number is assigned by the system it is strongly suggested that this number be written down on the invoice document (a "posted" or "entered" stamp with a space in which to write the number works quite well for this purpose). The register number is the unique identifier for an AP register record. The Register number provides you with a quick and easy way to tell that the invoice has been posted and it may be also be used to quickly find the AP Register record associated with the invoice in the AP Inquiry programs.
6. Record the journal entry number used to post each invoice or credit memo on the invoice. This step is optional as each invoice may have several journal entry transactions associated with it (entry, payment, assignment all create journal entries that are associated with specific invoices). In older versions of the system, the register number and journal entry number used to post an AP invoice were the same. In the current software these numbers are assigned from separate counters and the register number is still the unique identification for a specific vendor invoice record.
7. Temporarily file the invoices entered during the day. The invoices and credit memos which are processed during the day should be filed together until the daily reconciliation and balancing procedures have been successfully performed. If the accounts payable sub-ledger and general ledger activity for the day do not agree, then the cause of the problem must be determined and this may require you to check each of the invoices processed during the day. The temporary file of all invoices processed since the last successful balancing can help speed up this process if it becomes necessary.
8. Run the Accounts Payable Entry Register report for the current day and review it. This report will audit all of the invoices entered during the day and it will print an error message if any of the invoices did not properly post to the general ledger. Note: If this report does output any errors, you should immediately bring them to your system administrators’ attention so that the transactions can be corrected. This will also allow him or her to find and correct the source of the problem so it does not reoccur.
9. Compare the adding machine total of the physical invoice copies (done earlier in this procedure) to the daily total printed on the Accounts Payable Register report. The totals should match. This step ensures that all of the invoices were processed, and that they were entered for the correct amounts. If the totals do not match, the discrepancy should be found and corrected.
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AP Physical Controls