The specific fields appear when you select the type of payment. For each payment type, the selection of fields comprising this section is different.
Payment to vendor
Advanced mode - turn on the advanced mode to view or override the vendor accounts for payables and advances which are affected by accounting transaction created by the make payment document.
If a payment is identified as a payment for an open purchase invoice, the make payment document clears the liability of your company by debiting the selected liability account with the sent total amount.
If the payment is identified as an advance payment, the advance account is debited with the sent total amount. The amount can be also allocated to both accounts, if certain residual amount is left after clearing the company liability.
Note: Use the advanced mode cautiously. Overriding the accounts may distort the purchase process or cause significant errors in the system if the mistake is made while altering the accounts.
For Payment to vendor type, the following options are added:
Payables account - select an account in which expenses sent to the specified vendor are to be recorded.
Advance account - select an account in which advances sent to the specified vendor are to be recorded.
Match purchase invoices option
If you want to close purchase invoices manually, turn on the Match purchase invoices option.
You will get access to the Open purchase invoices section. In this section, you can add and modify open purchase invoices that you want to close or partially close with the sent payment amount.
If you create your make payment document from the specific purchase invoice, the Match purchase invoices option is turned on by default and the section includes the purchase invoice from which the make payment document has been created.
You can also view the purchase invoice payment details such as closed payables, discount %, discount amount and amount of payment etc. as well as change them if required.
Note: The purchase invoice payment details are auto-completed.
If your modifications cause any discrepancies between the sent amount (indicated in the Sent amount field in the Sent amount section) and the Amount of payment, the difference between the amounts is displayed in the Not matched amount field.
Note: The Not matched amount field is not editable and you cannot override it.
You can also manually add other purchase invoices to be fully closed or partially closed.
To do that
1. Turn on the Match purchase invoices option.
2. In the Open purchase invoices section, do one of the following:
- To add all open purchase invoices together with their details, click the Fill button.
OR
- To add purchase invoices manually, click +Add new.
Note: In either case, a single or multiple purchase invoices are added as line items. However, if you add all open purchase invoices by clicking the Fill button, all purchase invoice line item fields are auto-completed and you do not have to fill them in manually.
Purchase Invoice Line Item Fields
Field | Used for |
Invoice | Purchase invoice which you want to close fully or partially. Once a purchase invoice is selected, all the other purchase invoice payment details are auto-completed. However, you can change them, if necessary. |
Date | Date of the purchase invoice you want to close. |
Invoice currency | Currency of the purchase invoice you want to close. |
Invoice open amount | Open amount of the purchase invoice which is to be closed. |
Discount, % | An early payment discount in %. It reduces the amount your company owes the vendor if you pay before the due date indicated in the purchase invoice. Conditions on which the discount is applicable are retrieved from the net terms specified in the purchase invoice. The due date of the purchase invoice and the date of the make payment document are compared, and if the payment is made within the period for which the early discount is provided, the discount percentage is displayed in the field. |
Discount amount | The amount deducted from what your company owes the vendor if you pay before the due date indicated in the purchase invoice. The discount amount is worked out as: Discount amount = Amount of payment x Discount % |
Closed payables | The amount of the payables for the specified unpaid purchase invoice to be closed with the make payment. The amount of closed payables is calculated as follows: Amount of closed payables = Amount of payment - Discount amount (if applicable) |
Open amount in payment currency | Open amount of the purchase invoice which is to be closed indicated in payment currency. |
Amount of payment | Total amount of the purchase invoice after the discount for the purchase invoice is calculated. |
If you create a make payment document for a purchase invoice or multiple purchase invoices from scratch without reference to a particular purchase invoice, the Match purchase invoices option is turned off by default. If you keep it turned off, the FIFO (the first in, first out) method is used to close the purchase invoices issued by a selected payee.
Purchase invoice closing according to the FIFO method entails:
The purchase invoices by a payee are bulk closed automatically, and the first purchase invoices raised are the first purchase invoices to be closed with a make payment. The whole sent payment amount is allocated to the unpaid purchase invoices matching the purchase invoice amount of payment. If the payment amount is insufficient to pay down all the open purchase invoices, some purchase invoices (the last purchase invoices raised) will remain unpaid or partially paid. The remaining unpaid amount will persist as a vendor liability. If an over-payment is made, the overpaid amount is recorded as an advance for the vendor.