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Entering invoices as they are received - how to find in multiple batches when time to pay?

  • 23 March 2021
  • 8 replies
  • 618 views
EM81

Good morning all,

I know very little about our AP Process at the moment, but here’s the situation I’ve been tasked with improving.  Currently, our AP dept enters invoices into AP Invoice Entry when they are ready to pay them, not as they are received.  So our AP Aging report is useless and some vendors are falling through the cracks, creating problems for us.  When we spoke to Epicor they said invoices should be entered as they are received (which makes sense), however our AP dept pushed back saying that if they did it that way, how would they search through multiple groups in order to find the invoices they were ready to pay when the time came?  I am reading through all the guides, etc to find that answer, but figured this was a better way to get the answer.  How do you handle your AP invoices?  Entered as received?  And how exactly do you pay them when you’re ready to do so?

Appreciate any insight you can give me!

Erin

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Best answer by loriv 23 March 2021, 18:46

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~Erin

8 replies

P
Userlevel 3

Erin,

We could discuss options at length, but the following is what I have done over and over as both an Epicor financial consultant, as well as a Controller and CFO.

First, use the system!

Enter invoices and post them as soon as possible, using accurate payment terms.

When it is time to pay them, use the system to have them selected based on DUE date.  This even pulls ahead for prompt payment discounts, which are almost always worth taking.

For times when cash is tight, one can select individual invoices to pay from either the aging, or an alternative source.

Paul Jackson CFO Aseptico Woodinville WA
K

Erin,

Invoices should be entered as received.  This allows you to use the system and see what is in your open payables and answer questions from your owners/managers/vendors without rifling through papers.  The terms set on your vendors will determine when they are due for payment or if that is not set up, you can enter the terms at invoice entry.  For issuing payments, you will create a payment group based on the due date that you want to pay through.  Someone can add or remove invoices from the group as they see fit or just pay what is currently due.  Then you repeat the process each time you are ready to do a check run.

 

Let me know if you have any questions.

T
Userlevel 3

Hi Erin

When you enter the invoices you enter the invoice date and the due date. This is how invoices are then aged. It sounds like your invoicing department are entering invoice with the due date and the invoice date on the day they enter them which will mess up the aging.

If the invoices are entered with the correct dates you’ll also be able to use these dates for generating payments and not rely on people manually looking through a stack of invoices.

L

I think their confusion is that there are TWO places where “invoices” are dealt with, so to speak.  One is A/P Invoice Entry.  This is where you enter the invoice (immediately) and match it to the Receipt (from Receipt Entry) and post.  You don’t want to search for something in an unposted group because the idea is that you will post a group as soon as you can (at least daily).  Our A/P Dept individually each keeps a daily Group and then an “X” group.  The X Group is for invoices that need logged but have a different PO price or extra charge that the Buyer needs to address.  This invoice would get transferred into an X group (example John Doe would have a Group called 032321JD and a Group called JDxx.  Invoices get entered (and Receipt pulled) in the 032321JD Group, but if there is a reason to NOT post it, it gets transferred to the JDxx Group).  THEN the place where POSTED invoices are managed is in “Payment Entry.”  That’s where you would “find” your Invoices to be paid. 

EM81

Thanks to everyone for your responses.  I’m trying to understand this process and the way it should work so I can tell management what we need to change.  It’s challenging when it’s a module I have little to no experience with.  

~Erin
A

Erin,

 

All the above answers from Paul, Kevin, and Tim reflect the Standard AP process for handling “Clean” invoices from a supplier where Clean is the PO, Receipt, and Invoice all Match and can be posted where the Group then disappears and the Invoices are then lined up as noted in the System based on Due date driven by their Purchasing Terms. 

Lori pointed to the situation where those invoices are not “Clean” and need some extra TLC to fix one or more elements to allow them to process. This is also a process that needs to be created and tested as it does happen and the ability to Transfer to another Group as a HOLD is part of the AP Functions.

Has your team reviewed the Embedded Education course on AP? That covers the entry of Invoices and ultimately processing payments in a Daily AP Processing flow.

J
Userlevel 1

Did anyone mention the Payment Proposal Report? It lists the Due Date, Gross Payment Amount, Invoice number, and Supplier. This would allow the AP Dept to search through the invoices that they want to pay. The Payment Proposal Report will only be useful AFTER you post your invoices in AP Invoice Entry, so I’ve attached an example screen shot.

 

EM81

Thanks, Jay, no I had not heard about the Payment Proposal Report yet.  I will definitely look into that.  Thanks so much!

And wnestel, thank you for your response too.  I have not reviewed the Embedded Education course on AP as of yet, but I will certainly do so.  I know that we do have instances where the invoices are not “clean” as well, so holding and transferring looks like the way to go there.  I’ll have to take the course myself to better understand it.  When we told AP to hold and transfer any invoices they weren’t ready to pay, they seemed to be under the impression that this would create “double” work for them.  But again, I will take the course and hopefully then I’ll understand the intricacies better.

These responses are so helpful!  Thank you all!

~Erin

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