Selecting Invoices for Payment
This section describes how accounts payable invoices are selected for payment processing. In general, there are two methods that can be used to record payments against accounts payable invoices. These methods are.
• Creating a computer generated payment. In this case, the invoices to be paid are selected based on the Pay date that has been specified in each open invoice (other optional selections like Vendor Company, Vendor Type, and Invoice type can also be used during payment processing). Normally the current date is used as the Pay date cut-off when you are processing an automatic payment. The operator verifies the invoices to be paid using a lookup program that displays the open invoices in Pay date order, or the Proposed Disbursements Report (which allows you to select invoices based on pay date). If the invoices shown in the lookup or on the report are not the invoices that need to be paid, the operator modifies the pay dates of any invoices that need to be excluded from or included in the check run. Once the Proposed Disbursements report shows the correct invoice detail, the operator runs the Create Checks or Wire Transfers program (using the same pay date and other selections that were used on the report) to create the payment transactions in the GL and update the appropriate invoices. If an automatic check run is processed, the system creates but does not print the checks. If a wire transfer is processed, the system also creates the appropriate payment transaction and it updates the AP invoices being processed. The wire transfer is issued by calling the bank and initiating the transfer. The checks are printed using the Accounts Payable Check Printing program and are then mailed to the appropriate vendors.
• Processing a Manual Payment. In this case, the operator manually specifies the invoices and amounts to be paid, and the system updates the invoices and creates a payment transaction. Manual payments are normally used to record handwritten checks or similar payment transactions that have already been issued (payments sent through an electronic banking system, cod payments issued before the invoice is in the system). Since manual payments are processed by selecting the invoices to be paid, the pay date in each invoice is not updated or used during payment processing. Note: In General, Manual Payments should be processed prior to computer generated payments. This ensures that any manually paid invoices are not included in a computer generated payment run by mistake.
More:
Computer Generated Payments