Accounts Payable Overview

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  • Business Process:
  1. Creation of Voucher
  2. Voucher Approval
  3. Voucher Posting
  4. Payments
  5. Payment Posting

 

  • Basic Setups in AP:
    • Vendor SetUp
    • Bank SetUp
    • Branch SetUp
    • Account SetUp
    • Withholding setup/1099 Rule

 

  • Vendor SetUP:

Navigation: VendorsVendor InformationAdd/Update Vendors.

  • Type of Business:
    1. Supplier Vendor- To provide or to supply goods.
    2. Employee Vendor- Employee payments like travel, relocation, etc.
    3. Withholding Vendor- Vendors to which tax is paid.(Income tax authority or HDFC bank, UTI bank)

 

  • Classification Based on Persistence:
    1. Regular Vendor- Vendor from whom we regularly buy goods. (Coffee powder, papers, systems, etc.)
    2. One Time Vendor/Single Payment Vendor- Vendor for whom we pay them only once. (Land payments)
    3. Recurring Vendor- Vendors come on a regular basis, at a particular time. ( Rent, current bills)

 

  • Classification Based on withholding/1099 Rule/Income Tax:
    1. Withholding Vendor- Customer or company is responsible to pay the tax. (Contract employee)
    2. Non- withholding Vendor- the Vendor is responsible to pay the tax. (Permanent Employee)

 

  • Bank SetUP:

Navigation: BankingBank & BranchesBank Information.

  • Branch SetUP:

Navigation: BankingBank & BranchesBank Information.

  • Account SetUP:
  • Internal Account: Conceptual things used to reconcile or budget your expenses. (Food acc, petrol acc, etc. which gets deducted from our account)

     Navigation: BankingBank AccountsInternal Account.

  • External Account: Physical existence of the account. (HDFC acc, ICICI acc)

   Navigation: BankingBank AccountsExternal Accounts.

  • Withholding SetUP:

Elements of withholding:

  1. Withholding Rule
  2. Withholding Class
  3. Withholding Entity
  4. Withholding authority
  5. Jurisdiction
  • Withholding Rule- Thresholds and the percentage that need to be deducted as a tax. (Eg: 194c3- 0-20k no tax, 20k-999999 10%)

Navigation: SetUp Financials/Supply ChainProduct RelatedProcurement optionsWithholding Rule.

  • Withholding Class- Collection of rules.

Navigation: SetUp Financials/Supply ChainProduct Related Procurement optionsWithholding Types/Classes.

  • Withholding Entity- Used to combine withholding rule, withholding class, withholding authority & jurisdiction.

 

      Navigation: SetUp Financials/Supply ChainProduct RelatedProcurement optionsWithholding Withholding Entity. 

  • Withholding Authority- Person to which the company pays the deducted tax amount from vendors.

Navigation: VendorVendor InformationAdd/UpdateVendor

  • Jurisdiction- Responsible court to take legal actions against withholdings.

Navigation: SetUp Financials/Supply ChainProduct RelatedProcurement optionsWithholding Jurisdiction.

 

  • When to pay tax?

We pay tax for a financial year. As system doesn’t know this we have calendars.

  • In INDIA the financial year is from-(April 1 to March 31), in US it is from-(Jan 1 to Dec 31).
  • 999 and 998 are Adjustment periods- These are used to make some adjustments to the transactions or accounts in which the bank statements are equalized with our peoplesoft system statements.

 

  • Creation of Voucher:

Navigation:  Account PayablesVouchers→Add/Update →Regular Entry.

  • Voucher Types:
  1. Regular Voucher- Normal Voucher.
  2. Prepaid Voucher- Used for advanced payments, this automatically reduces the advance amount paid and only pays the balance amount to the vendor.
  3. Journal Voucher- For adjustments between GL and AP.
  4. Single Payment Voucher- These are for single payments.
  5. Reversal Voucher- It will be of –ve amounts, where the orders are canceled.
  6. Adjustment Voucher- These are to do the adjustments for regular vouchers, where it hits the GL.(When vendor asks for transport charges, etc.)

 

  • Depending on withholding:
  1. Withholding- Voucher for withholding vendors.
  2. Non-withholding voucher- Voucher for non-withholding vendor where he pays the tax.

 

 

  • Depending on Sub-Systems:
  1. PO based vouchers.
  2. Non-PO based vouchers.

 

  • Depending on Items:
  1. Asset Voucher- Buildings, systems, chairs, cars, etc.
  2. Non-Asset Voucher- Coffee powder, paper, etc.

 

  • Voucher Approval:

Navigation:  Account Payables→Vouchers→Approve→Approve Voucher

 

  • Voucher Posting:

      Navigation:  Account Payables→Batch Processes→Vouchers→Voucher Posting

  • Create Accounting Lines- These details directly go to GL.
  • Create Payment Lines- These details go to vendor for payment and then to GL.
    • Regular
    • Withholding

 

  • Payments:
  • Express Payments/ Inhouse cheque Printing- These are single voucher payments.

Here go to payment page click on express payment hyperlink and

set the server name as PSNT.

Navigation:  Account Payables→Vouchers→Add/Update →Regular Entry

  • PayCycle-Bulk or multiple voucher payments at a time.

 Navigation:  Account Payables→Payments →PayCycle Processing→PayCycle Manager

  • PayCycle Elements:
    1. Step- A single Process.

Navigation:  Account Payables→Payments→PayCycle Definition→Step

  1. Step group/ Step table- Collection of steps.

Navigation:  Account Payables→Payments →PayCycle DefinitionàStep Table

  1. PayCycle Definitions- Consists of selection criteria in the step group.

 Navigation:  Account Payables→Payments →PayCycle Processing→PayCycle Selection Criteria.

 Execution sequence for PayCycle:

    1. PayCycle Selection- Select the list of vouchers to be paid.
    2. Deselect Payments/Hold Payments- If we want to pay only for 10 out of 15 vouchers or if there is any dispute between the vendor and company then the payment vouchers are kept on hold.
    3. Payment Creation- Payment ID Reference (Cheque Number).
    4. Reset PayCycle- To reprint cheques, if there was any problem in printing cheques.
    5. Print Cheques- Here we print the cheques.
    6. Cancel PayCycle- If we came to know that the payments that we have done are wrong then we cancel the payment, also called payment cancellation.
  • Payments Posting:

Navigation:  Account Payables→Batch Processes→Payment →Payment Posting.

  • Processes:
    • Posting Voucher Process- AP_APY2015(Application Engine Process)
    • Create Payments Process- AP_APY2015(Application Engine Process)
    • Print Cheques Process- APY2021(Crystal Report Process, Crystal Cheque)
    • Payment Posting Process- AP_PSTPYMNT(Application Engine Process)
  • Different Dates to be specified:
    1. Invoice Date- The date on which the bill is generated by vendor.
    2. Transaction Date- The actual date of transaction with vendor to pay him the amount.
    3. Accounting Date- The actual date on which the transaction should the account.
    4. Payment Date- The date that will be printed on the cheque.

 

  • Important Tables for Account Payables:

VOUCHER, VOUCHER_LN, PAYMENT_TBL – Create a Voucher,Voucher payment

PAYMNT_VCHR_XREF – Payment Creation and Voucher posting

VCHR_LN_ACCTG – Voucher posting and payment posting process

 

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