AP: Bills Payable/Future Dated Payments/Post Dated Cheque Configuration and Process

 

10. Bills Payable/Future Dated Payments/Post Dated Cheque Configuration and Process
Meaning
*Bills Payable is nothing but issuing a post dated cheque
*These are future dated payments
Standard Process	Bills Payable Process
When we create a Standard Invoice	When we create a Standard Invoice
Expense A/C Dr	Expense A/C Dr
To Accounts Payable A/C	To Accounts Payable A/C
When we create a Payment	When we create a Payment
Accounts Payable A/C Dr	Accounts Payable A/C Dr
To Cash Clearing A/C	To Bills Payable A/C
The cheque got Reconciled and cleared in Bank	Run Bills Payable Process
Cash Clearing A/C Dr	Bills Payable A/C Dr
To Cash A/C	To Cash Clearing A/C
	Reconciliation
	Cash Clearing A/C Dr
	To Cash A/C
Final Entry
Expense A/c Dr
To Cash A/c
Setups
1. Provide Bills Payable Account in Common Options for Payables and Procurement		Task	Manage Common Options for Payables and Procurement
2. Create Payment Method for Bills Payable		Task	Manage Payment Methods
Process
1. Create Invoice
2. Process Payment with future date
3. Run Bills Payables Process
Setups
1. Provide Bills Payable Account in Common Options for Payables and Procurement
Task: Manage Common Options for Payables and Procurement
*Add Bills Payable Account - 21070
2. Create Payment Method for Bills Payable
Task: Manage Payment Methods
*Here check the checkbox called Bills Payable
Process
1. Create Invoice
*Make sure that we have unchecked the check box called use withholding tax and remove withholding tax group at supplier site level. And also from supplier profile
Path: Payables >> Invoices >> Taskpane >> Create Invoices
*Here in Payment Method we have to populate the Bills Payable Payment Method in Manage Installments at Invoice level
2. Process Payment with future date
*Here select the payment method which we created for Bills Payable
*Now clickon "Advanced Tab" and select the maturity date
*Here we are giving the payment today with future date and the maturity date will be printed on the cheque
*Select the invoices to pay and pay it
*Here the payment status is "Issued".
*If the payment status is "Negotiable" then the accounting entry is
Accounts Payable A/C Dr
To Cash Clearing A/C
If the payment status is "Issued" then the accounting entry is
Accounts Payable A/C Dr
To Bills Payable A/C
3. Run Bills Payables Process
Path: Tools >> Scheduled Process
*Run ESS Job " Update Matured Bills Payable Status".
*After running the process the payment status is changed from issued to negotiable
*Here we have to again post to the ledger and the new entry is
Bills Payable A/C Dr
To Cash Clearing A/C
After doing Reconciliation
Cash Clearing A/C Dr
To Cash A/C