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Accounts Payable can’t be used until a company has been set-up in the General Ledger module. That procedure defines the company code and allows set-up of GL accounts, currency codes, and weight/measure codes that will be used in all modules, including Accounts Payable.
1. Required Tax Codes
If suppliers charge any federal, state, provincial, county, municipal, or any other taxes on the goods or services they provide, a tax code must be set-up. Set-up one code for each different tax charged (these may have already been set-up if AR set-up has been completed).
2. Required Payment Terms
Completion of the setup of any vendor can’t be made without specification of a default payment term for the vendor. Payment terms appear on vendor vouchers indicating when the amounts are due and whether any discounts are applicable, among other details.
If suppliers do not offer any terms, set-up a code, such as "REC", indicating the amount is due upon receipt of the goods or services.
Payment terms are maintained via the Payment Terms screen in the System Data module (standard Treeview path: System > Global Tables > Payment Terms).
3. Required Bank Accounts
Bank account codes are required for automatic checking procedures and check reconciliation. One bank account code should be set-up for each bank account that is used by the company.
Since checks are also produced for the Payroll module and reconciled in the Accounts Receivable module, this step may have already been completed. However, if suppliers are paid out of a different bank account than you pay employees, the bank account used for paying suppliers must be set-up separately on this screen.
Each vendor defined must have a default bank account (cash account) from which to pay amounts owing.
4. AP Control File
The Control Maintenance file contains important information about how Accounts Payable will interact with other modules, what special forms it uses, and what general rules will govern certain processing activity. The Control file is also used to set-up default GL accounts specific to the Accounts Payable. These default accounts will appear for each new vendor set-up, making entry of new vendors faster.
5. User’s Defaults: Company, Department, Cash Account, Check Handling Code
Via the Set User Defaults screen (standard Treeview path: Accounts Payable > Setup > Set User Defaults), user defaults are selected, such as the user’s default company, to facilitate operations and to reduce mistakes.
6. Vendor Class Codes
Vendor class codes are used to group vendors who sell similar goods or services.
Each vendor defined must be associated with a vendor class. If you don't plan to use vendor classes, set-up one class on this screen with the code "ALL", and enter "ALL" as the class for each vendor being set-up.
If using the Material Management, vendor classes are used to determine brokers and sub-haulers.
7. Vendor Preference Codes
Vendor preference codes allow the grouping of vendors who are preferred as suppliers. These codes may be used during payment selection to decide which vendors get paid.
Each vendor may have a preference code. When not using vendor preference codes as a method of selecting the vouchers that should be paid, it is not necessary to set these codes.
8. Currency Account
(Optional) If using the AP Accounts By Currency feature, accounts should be set-up by currency data.
9. Recurring Payable Group Codes
(Optional) If recurring payable group codes are not required, this step may be skipped and set-up at a later date. Recurring payable group codes facilitate the voucher entry process by grouping a collection of repetitive expenditures made on a regular basis. For example, a lease for photocopy machines would have invoices, for the same amount, billed on a monthly basis for a fixed term.
10. Check Handling Codes
(Optional) If check handling codes are not required, this step may be skipped.
These codes are used to sort the Accounts Payable checks by the assigned handling code as well as print separate checks for each set of vouchers entered for the same vendor.
11. Insurance File
(Optional) If the insurance file is not required, this step may be skipped.
The Insurance File sub‑menu is comprised of an Insurance Coverage Type (Compliance Codes), Insurance Company Maintenance (Insurance/Bonding Companies), and Insurance File Maintenance screens. The maintenance screen for Vendor Insurance (Vendor Compliance) allows insurance expiry dates to be tracked on a vendor-by-vendor basis. If a specific insurance policy has expired for a vendor, the system will prohibit the processing of vouchers and checks. This option is usually applicable for those companies dealing with sub-contractors.
12. 1099 Codes
(Optional) If 1099 reporting is required, make sure that the required 1099 codes are defined via the 1099 menu before creating business partners or vendors.
13. Business Partners
For more details, see Accounts Payable - Maintain Business Partners.
14. Invoice Series Codes
(Optional) Invoice series codes allow the definition of specific AP accounts by types of invoices and even the definition of default distribution by code. It is also possible to print the AP aged report by invoice series code if required.
15. Registration Group
Registration groups are only applicable if using the invoice registry.
16. Business Partners & Vendors
Before any vouchers can be entered in the Accounts Payable module, the main vendors business is done with should be entered as business partners.
To store additional data that is only relevant to a vendor or customer business partner type, vendor and customer records are created from and tied to business partner records. vendor and customer records are based on business partner records, hence, to create a customer or vendor record, its base business partner record must first be created. vendor records are relevant to tasks in Accounts Payable, and customer records are relevant to tasks in Accounts Receivable.
Once a business partner is defined, it can be assigned to a company or a set of companies, and distinguished as a vendor.
If the vendor master list has been electronically transferred from a previous computer system, each one may still have to be accessed to enter the desired GL accounts, vendor classes, payment terms, bank accounts, and vendor preference codes.
This procedure is complete for the company being set-up. To set-up Accounts Payable for another company, repeat these steps from the beginning.
Once Accounts Payable has been set up for each company being used, opening balances can be entered for vendor accounts. See Accounts Payable - Set Up Opening Balances for more details.