Use this region to control accounting information for your Payables system.
Account For Payment
debit the AP Liability accountcredit the Cash Clearing account
debit the Cash Clearing account
credit the Cash account
debit the Bank Charges accountcredit the Cash account
bank errors
Debits and credits depend whether the bank error was a positive or negative amount for Cash account and Bank Errors account.
You can select one or both options. Carefully consider these settings at implementation time. After you set them and save this record, the only change you can make is to also account for the payment when the payment clears
Carefully consider these settings at implementation time. After you set them and save this record, the only change you can make is to also account for the gain/loss when the payment clears.
- Cash Basis: Record currency gains and losses between payment time and payment clearing time. For future dated payments, records gains and losses between payment and payment maturity and then between payment maturity and payment clearing
- Accrual Basis: Record currency gains and losses between invoice time and payment issue time. For future dated payments, record gains and losses between invoice time and payment issue, and then between payment issue and maturity time of the payment.
- Then record currency gains and losses between payment time (payment maturity time for future dated payments) and payment clearing time
Bill Payable Account Source
Bills Payable (Future dated payments) is used to control the timing of your payments, and therefore control your cash flow. A future dated payment helps bank to disburse funds to your supplier's bank on a specific date which is known as the maturity date.
You can define a future dated payment account at both the supplier site and the payment document level. This option controls which account Payables will use to create accounting entries for future dated payments.
From Payment Document
From Supplier Site
Automatic Offset Method
Enable Automatic Offsets by selecting Balancing or Account as your Offset Method if you want Payables to automatically create balancing accounting entries for your invoice and payment transactions. Carefully consider this option before setting it. under certain circumstances, changing this setting can result in accounting irregularities.
None
Do not use Automatic Offsets. For your invoice transactions, Payables creates one liability accounting entry, and for your payment transactions, Payables creates one cash type accounting entry.
Balancing
Payables uses the supplier site's default liability account and overwrites the balancing segment (usually the company code) with the balancing segment from the expense distribution GL Account.
Account
When creating the offsetting liability account, Payables uses the expense GL Account from the invoice distribution and overwrites the account segment with the default liability account from the supplier site.
Discount Method
- Payables credits all discounts to the system Discount Taken account you define in the Financials Options.
- If you enable Automatic Offsets, and you want to have Payables distribute Discount Taken amounts across balancing segments, choose this method.
- If you enable the Use Bank Charges option in the payment region, the Discount Distribution Method defaults to System Account and you cannot update it.
- Payables automatically prorates any discounts across all the invoice distributions. Payables assigns the discount to the charge account unless the invoice is matched to a purchase order with Accrue on Receipt enabled, in which case it is assigned to the price variance account.
- If your Exclude Tax From Discount Calculation Payables option is enabled in this window and you enable this option, then the discount is prorated only to the expense lines and not the tax lines.
- Payables automatically prorates a percentage of the discount amount across the tax distributions.
- Payables only prorates the percentage of discount amount equal to the percentage of your tax distributions. Payables credits the remaining discount amount to the Discount Taken account you enter in the Financials Options window.
- For example, if your tax distributions are 10 percent of the total invoice amount, Payables prorates 10 percent of the discount amount across the tax distributions. Payables credits the remaining 90 percent of the discount amount to the Discount Taken account.
- You cannot select Prorate Tax if your Exclude Tax From Discount Calculation Payables option is enabled.
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