v.5 Accounts Payable: Best Practices (Course #V210) Presented by: Dave Heston Shelby Consultant 2017 Shelby Systems, Inc. Other brand and product names are trademarks or registered trademarks of the respective holders.
Objective To help you learn best practices for using Shelby v.5 Accounts Payable This session presents the following topics: How Accounts Payable relates to other modules o GlobaFILE and General Ledger o Linking to General Ledger o Cash vs. Accrual How to process ACH and Email Vouchers o Company ACH information o Email Voucher settings o Vendor ACH Information o ACH Invoice Entry o ACH Payment Printing Vouchers and Emailing Vouchers How to process Distribution Information o Setting up a Distribution o Using a Distribution How to work with Vendor Information o Adding or Updating Vendor Information o Delete a Vendor (Purging Vendor History is also and option) o Organize Vendor Names that start with The How to process Invoices o Print on Separate Check/Use ACH/Payment on Hold o Invoice/Adjustment/Manual Check o Purchase Order o General Ledger Distribution o Keep Distribution Line for Next Vendor o Acquire/View 2
How to Void a Check o What is Keep Distribution Line as Unpaid? o Let s talk about when to void a check; within the Current Period or later? How to use Recurring Payments o Enter Recurring Payment(s) o Transfer Recurring Payment(s) How to use Inquiries to Correct Mistakes o Remove Unpaid Invoice(s) o Correct 1099 Information o Correct Project Information How to run Account Payable Reports o Print Outstanding Items o Other Account Payable Reports 3
How Accounts Payable Relates to Other Modules Before we begin to discuss the setup and operation of the Accounts Payable module, it is important to understand there are many facets of information that Shelby collects. The information you see displayed in Accounts Payable is based on two foundations: GlobaFILE and General Ledger. GlobaFILE (General Information) contains the core information for every person and organization that is stored in Shelby. General Ledger, on the other hand, is the foundation for all financial information in Shelby. When setting up the Accounts Payable module there are two mandatory items that need to be checked. Establish your interface with the General Ledger. This sends a Journal Entry to the General Ledger when you post and pay expenses. By entering your payables # found in the liabilities section of your chart of accounts you indicate you are operating on an accrual system. Leave the field blank to operate on a cash system. Both the Accrual and Cash systems are described below. o Accrual System This method sends entries to the General Ledger when invoices are entered and updated. The Accounts Payable account are credited and the expense or other accounts being charged are debited. Once the checks are written and updated, the Accounts Payable account is then debited and the bank account is credited. o Cash System Using this method, no entries are sent to the General Ledger when invoices are entered and updated. The bank account is credited and the expense or other accounts being charged are debited when the checks are written and updated. 4
Process ACH and Email Vouchers Many companies are now paying vendors and employees through electronic transactions and sending notification via email. In Shelby v.5 two areas need to be set up prior to using ACH payments. The company information for ACH needs to be set up prior to setting up the vendor information. You are looking at the complete process for using ACH payments and email vouchers. Company ACH Information This feature allows your organization to use the ACH (Automated Clearing House) to transfer money from your bank to the vendor s bank. Your financial institution provides you with the information needed to set up the Company ACH. The system prints a voucher for the vendor instead of a check and creates a file to send to your financial institution for the transfer. Before you get started, set up the vendor information and then enter the transit/routing information for each vendor who is going to participate. After the setup work is done, every time you process checks the system prints the vouchers and creates the file. Company Name Your organization name. Company ID If you enter a number in this field, it prints on the Verification Report and is added to the ACH.txt file as Company ID. If this field is left blank, the Federal ID number entered in Company Information is used as Company ID. Use Offset detail record? Check with your bank to determine if it requires the offset line that contains the total of the transactions in the ACH.txt file. Immediate Destination ID Type the routing number and check digit of the immediate destination or the ACH operator. Immediate Destination Name Type the immediate destination name or the ACH operator. Immediate Origin ID Type the immediate origin identification number given to you by your bank. Immediate Routing # This is always the routing number of the immediate origin. This is usually the company bank's routing number. It may be the same as the immediate origin ID. Immediate Origin Name Normally this is your bank's name. Receiving DFI ID Type the transit/routing number of the receiving financial institution. Receiving DFI Account # Type the bank account number of the receiving financial institution. ACH Security The information typed here precedes the file. If the security record is not the same as you have predetermined with your financial institution it does not accept the file. File Location This field indicates the path and file name of the file created when you process checks to send to your financial institution (e.g., c:\shelby\ssv.5.dat\ach.txt). 5
Use Uppercase Select the check box to make the ACH file appear in all uppercase (required by some banks). Mask ACH Number on Verification Report Click the check box to hide the ACH Number on the Verification Report. 6
Email Vouchers Settings Set up SMTP information on the Email Vouchers tab to email Accounts Payable vouchers to vendors. The voucher is attached to the email message as a secured PDF file (provided the Secure PDF check box is marked in the PDF Export options). The vendor is prompted to enter the last four digits of its tax ID (or social security number for an individual) to open the file. The SSN is masked (except for the last four digits) on vouchers. Remember that you must enter a password for permission when the PDF Export Options screen displays. If this field is left blank, it defaults to your customer number. NOTE: Before you set up the SMTP feature, contact your network or system administrator and your ISP (Internet Service Provider) for proper configuration and explain what you are doing. Most ISP's consider any mass or bulk emailing SPAM and have methods in place to prevent SPAM mailing, even going so far as to cancel an account for SPAM mailing. Popular web based email services such as Yahoo, Netscape, and MSN no longer allow SPAM mail. If you have a mail server running on MS Exchange or Novell GroupWise, there are settings that your administrator needs to make to allow the Send Mail function to work. Exchange Message Relaying needs to be enabled on the computer or computers which are using the Send Mail function. For GroupWise the controls for Internet addressing need to be set and configured. If you have setup questions, contact your administrator or the manufacturer of the application running your mail server (ex. Microsoft or Novell). 7
Vendor ACH Information Select the Default ACH Type from the drop down list (None, Checking, Savings). Select the DFI Bank Routing ID by entering the number or clicking to pick one from available selections. Type the DFI Bank Account #. Add Email address to Vendor Record. Using Email Vouchers To activate the Email Vouchers option, select the Email Vouchers check box on the Check Processing screen near the Print Checks button at the bottom right of the screen. 8
ACH Invoice Entry You are now ready to create invoices to be paid through the ACH process. When an invoice is created and the Vendor is set up for ACH payment, the check box defaults to this option and updates the ACH invoice tab. You can pay a Vendor with ACH even if the vendor is not set up for ACH. When entering the invoice you add the needed information to the ACH Information tab that appears when you select the Use ACH check box. This account information is saved with the invoice so it is possible to pay to different accounts if needed. 9
ACH Payment, Voucher Printing, and E mail Voucher This process includes selecting the invoices to pay and then printing the checks and vouchers. A register is generated prior to printing for you to verify and keep for your records. Check Processing is the same for checks or vouchers. An invoice set up to pay as ACH has this option marked on the Unpaid Invoice List in Check Processing. If you are emailing a voucher instead of printing a hard copy be sure to select the Email Vouchers check box near the Print Checks button. Once checks have been printed you receive the following message: When the checks are finished, an ACH report displays to verify the information and print for your records. 10
After the ACH report prints the vouchers are viewable on the next screen, create the file for email. From the top menu of the Print Screen select File > Save As > PDF. After selecting to save the vouchers as PDF documents the PDF Export Options window displays. 1. Save File As This is the file path to the server where the copies are stored. 2. Secure PDF? Select this check box to activate security for voucher retrieval. This requires the recipient to use the last four digits of the Tax ID or SS# found on the vendor record to open the file. The file itself does not have to be secured. 3. Click the OK button to start the email process. Send a message before sending the vouchers. To send an email voucher there must be a valid email on the Vendor record under Demographics. 11
Distribution Information You may have invoices that need to be charged to different General Ledger account numbers based on a percentage of the total amount of the invoice. In Distribution Setup you define the distribution information specifying the account numbers and the percentage to be charged to each account. The Percent Total must equal 100%. The distribution information is then used when you enter invoices. To set up a Distribution: From the Accounts Payable Home Base screen top menu select Utility > Distribution Information. Right click and select New. 1. Enter the name of the Distribution in the Description field. 2. Enter the Fund, Dept., and Account to charge and designate the percent of the total. You also have the option to include a Project and 1099 information. 3. Click the OK button to update. 12
Using a Distribution: You may have invoices that need to be charged to different General Ledger account numbers based on a percentage of the total amount of the invoice. You specified the percentage breakdown in an earlier step. The distribution information is then used when you enter invoices. Click the Use Distribution button at the bottom right of the invoice entry screen. 13
Working with Vendor Information Information for each vendor must be established prior to processing your first invoices. This is done all at one time under Vendor Information or individually at the time of invoice entry. The detail of each invoice processed is maintained for inquiring and reporting. When you open Vendor Information the screen is blank; either click your mouse to see all vendors or enter a name in Name Filter to see a specific choice. 14
Add/Update Vendor Information You can change any information on the Vendor record by double clicking on the name of the vendor. When the vendor record displays use the Navigator options to move through topics to update. 1. Default Fund, Department, and Account Number 2. Default ACH 3. Default Distribution 4. Default 1099 Status 5. Last Invoice information 6. NOTES!!!! Click the Save and Close icon to save the new information. 15
Delete a Vendor Deleting a vendor does not remove it from GlobaFILE, only from Vendor lists and reports. To delete a vendor, from the Accounts Payable Home Base select Vendor Information area. Select the correct vendor on the Information screen. (Caution: Verify the vendor information prior to deletion). Once you have confirmed the vendor is correct highlight the vendor in the list and delete the record. Click the Delete icon on the top toolbar or, while the vendor name is highlighted, right click and select Delete Vendor. The following message appears for you to read. Click the Yes button to continue and delete or click the No button to return to the Vendor Information screen without deleting the vendor. 16
Organize Vendor Names that Start with The Some vendor names start with a, an, or the. Note in the screen below, for example, there is a vendor named The Body Shop. Entering the name exactly this way presents a challenge to anyone searching for the vendor, especially if there are multiple vendors starting with The. A solution to this challenge is to use a semicolon within the name to control sorting (e.g., Body Shop; The). This example is sorted with the B s but prints on checks and reports as The Body Shop. Using this method, you search for the vendor by just typing Body. The record is not found if the search is for The Body Shop. 17
Processing Invoices Processing Accounts Payable (AP) involves entering the invoice information, printing the edit list to verify your entries are correct, and finalizing the invoices. You can enter invoices, adjustments, and/or manual checks. Any of the information is easily changed or deleted prior to finalizing the invoices. Once the invoices are finalized they move into the Process Checks section as unpaid invoices pending payment. 1. You have the options to Print on Separate Check?, Use ACH?, or Payment on Hold? 2. Is this an Invoice, Adjustment, or Manual Check? 3. Are you using the Purchase Order module? 4. General Ledger Distribution 5. Keep Distribution Line for next Vendor? (Dave has a story to tell.) 6. Acquire/View When would you enter a Memo?????? 18
Print on Separate Checks This option allows you to pay multiple invoices to one vendor with separate checks. Select the Print on Separate Check? check box when entering the invoice or select the Sep check box before processing checks. Use ACH discussed earlier Hold for Payment Check this box if you do not want to immediately pay this invoice. Adjustment An adjustment is usually referring to a duplicate invoice #. Create a negative invoice or adjustment by entering a minus before the amount ( ) to reflect a credit amount to be applied to the account. If the Credit Memo has a new number, you enter it as an invoice. Then complete the process as a standard invoice for payment. Manual check By select the Manual Check radio button on the Invoice Entry screen you activate the Check # and Check Date fields. All other information is entered as an invoice. After you finish the entry and return to the Invoice Processing grid run the Edit report, which reflects the check information. Use this report to verify data entry. When would you use this?????? Click the Save icon to finalize the manual checks. The system generates a manual check register and an AP journal entry report. These checks update to the GL for final posting. No further work is needed in AP. 19
VOIDING A CHECK You can void any checks that have been entered and finalized within the Accounts Payable module. This makes the necessary adjustments in the General Ledger work file, Accounts Payable, and Bank Reconciliation. If you have several checks to void, the program creates a journal entry for each one individually. If the check you are voiding has multiple lines of distribution, the void reverses each line. You cannot void a check that has been cleared in Bank Reconciliation. Correctly Voiding a Check(s) 1. You must supply a check number. Zero (0) should be used for ACH entries. 2. Do you want to Keep Detail Lines as unpaid? Let us talk about this. When you Post Entries to General Ledger, think about the original check date. o Did it fall within the current Period before you reconciled the Bank Statement? o Did it fall before the current Period, and have you already reconciled prior period Bank Statements? 20
Recurring Payments A Recurring Payment is an invoice that is entered once in the Recurring Payment grid and is then transferred (normally once a month) when you process invoices. An example of a Recurring Payment is an invoice to the mission board each month for $500.00. Rather than entering an invoice for this payment each month, enter it once as a recurring payment. Then, once a month go to the Invoice Processing screen and select Utility > Transfer Recurring Payments option when you process invoices. Once the invoice is transferred, you can change amounts, dates, or account information. After you transfer a Recurring Payment, it is processed the same as a standard invoice. Entering Recurring Payments 1. From the Accounts Payable Home Base screen select the Invoice Processing option. 2. From the top menu of Invoice Processing select Utility > Recurring Payments Information. (Or from the top menu of the Accounts Payable Home Base screen, select Utility > Recurring Payments Information.) 3. Right click in the Recurring Payments grid and select New. INVOICE # Enter an Invoice # that defines the invoice (ex. orch1). Each time the invoice is transferred the system adds the month and year (ex. orch102015 for October of 2015) to create a unique invoice number. DAY Enter the Day to pay. This is the day of the month you frequently transfer this invoice. It can be done at any time; this just gives the system a reference. At this point invoice entry is very similar to a normal invoice. FREQUENCY Select how often this invoice is paid (monthly, weekly, etc.). This allows you to transfer selected groups at appropriate times. Note: A Recurring Invoice requires a description on each detail line in the distribution. 21
Transfer Recurring Payment(s) Follow the same steps as above except select Transfer Recurring Payments. Fill in the box that displays as needed and then click the OK button. Invoices are ready for modification or processing. Due Date (MM/YYYY) This is added to the end of the invoice number. Invoice Date Becomes the invoice date for all invoices transferred at this time. Project, Due Day, and Frequency Filters for transferring invoices Typically, the Due Day and Invoice Date are sufficient for transferring invoices. Proceed to Invoice Processing where you can change, delete, or place on hold the recurring invoice as needed. Otherwise, proceed to Print an Invoice Edit and continue the process. 22
Remove Unpaid Invoice(s) (Why and When) Inquiries Correct Mistakes From the Accounts Payable Home Base screen select the Inquiries option to search for the unpaid invoice. Double click the invoice to be unpaid or undone. On an unpaid invoice you have the option to UNDO the invoice. This action removes it from Process Checks and places it back into the Invoice Processing grid. Make changes to the invoice or delete it in Invoice Processing. You cannot UNDO a paid invoice; you have to void the check. The Undo Invoice button is at the bottom of the Invoice Inquiry window. See below: 23
Correct 1099 Information When an invoice is entered and paid to a Vendor without using the proper 1099 classification, you can correct this in the Inquiries section. If all items to this Vendor are classified as 1099, this is set as a default on the Vendor record. To make the change after the item is paid: 1. From the Accounts Payable Home Base screen select the Inquiries option. 2. Select filters on the Criteria screen to locate the correct invoice and then click the OK button. To change the 1099 status from this screen: 1. Click the current 1099 status column. 2. Click the drop down icon. 3. Choose the 1099 status desired. NOTE: This is a per invoice line change. You must have update rights to modify 1099 Status within security to make this modification. Correct Project Information When an invoice is entered and paid to a Vendor and the Project Information is omitted or is incorrect, you can correct this in the Inquiries section. Note that changing the project here does not affect any journal entries. 24
Print Outstanding Payables Running Accounts Payable Reports The Invoice Listing is a list of paid, unpaid, or voided invoices. There are many options with this one report selection. These fields are all filters; the more you fill in, the narrower your list. From the Accounts Payable Home Base screen select the Reports option and then select Invoice Reports > Invoice Listing. When the Unpaid radio button is selected, you can produce a list of invoices, unpaid through a specified date. Note that they may be paid as of the current report date. When the Unpaid As Of check box is selected, a date field is made available. This generates a list that can be compared to your liabilities Payable account for the same accounting period. 25
Use the Aged Analysis Report to print invoices by due date or invoice date sequence. The report shows all current, future, and past due invoices and shows invoices in over 30, 60, or 90 day old format. This also generates a list that can be compared to your liabilities Payable account for the same accounting period. Other Accounts Payable Reports Let us talk about these reports o Vendor Summary (auditors like this one) o 1099s (Check vendor totals first. What forms are you using?) o Vendor Labels o Selections and Listings 26
Q&A Class Discussion 27
Dave Heston Shelby Consultant dave.heston@shelbyinc.com Dave served as an accountant for a Phoenix based CPA firm before he joined the staff of his church in 1977. Over the last 40 years Dave has served as an administrator at three churches in the Phoenix metro area, and he recently retired as the Director of Finance for Phoenix Seminary in AZ. Dave has been a Shelby user since 1985 and also trains as a Shelby Consultant on Shelby v.5 and ShelbyNext.