Back to F050: Basic Financial Configuration

Lesson 5: Configuration of Accounts Payable

Before users can start adding vendors and documents related to vendors in Acumatica ERP, the basic accounts payable functionality has to be implemented in the system. This lesson describes the basic configuration to be performed, including creating a vendor class and specifying the preference settings for accounts payable.

Accounts Payable: Vendor Classes

A vendor class groups vendors that have similar characteristics. Vendor classes can be based on the types of goods or services you purchase from vendors of the class or on other properties, such as the vendors' currency and payment methods. For instance, you might find it useful to create one vendor class for tax agencies and another for 1099 vendors.

Creation of a Vendor Class

You define vendor classes and their settings on the Vendor Classes (AP201000) form. You can then select the appropriate vendor class when you are creating a vendor account on the Vendors (AP303000) form, which causes the system to fill in the values of the class for the vendor. Any of these default values can be overridden. During basic system configuration, you need to create only the vendor class to be used by default; you then specify it as the default vendor class on the Accounts Payable Preferences (AP101000) form. Aer you specify the default vendor class, when you create another vendor class, the system automatically inserts the values of the default vendor class, any of which can be overridden. When you create a new vendor account, the default vendor class is initially specified as the vendor class, but you can change it to any other class.

Accounts Payable: To Create a Vendor Class

You will now define the default vendor class in the system, which will provide many of the settings for newly created vendors and for other vendor classes you create, thus easing the creation of these entities during the next phase of implementation. Among other settings for the vendor class, you will specify the credit terms you have created.

Story

Suppose that most of the vendors of the SweetLife company use the same settings, such as credit terms, payment method, cash account, AP account, and cash discount account. Acting as an administrator, you need to create a default vendor class with these settings so that it can supply default settings when vendors and other vendor classes are created in the system.

Process Overview

In this activity, on the Vendor Classes (AP201000) form, you will create a vendor class and specify the default settings for it.

Step: Creating the Default Vendor Class To create the default vendor class, do the following:

Sign in to the company you have prepared with the admin username.
On the Vendor Classes (AP201000) form, add a new record. Lesson 5: Configuration of Accounts Payable | 31
In the Summary area, specify the following settings:

Class ID: DEFAULT
Description: Default Vendor Class

In the Default General Settings section of the General tab, select US - United States of America in the Country box.
In the Default Financial Settings section of the General tab, specify the following settings:

Terms: 310N30 - 3% 10 Days- Net 30
Payment Method: CHECK - Check Payment
Cash Account: 10200 - Checking Account

On the GL Accounts tab, specify the following accounts:

AP Account: 20000 - Accounts Payable
Expense Account: 81000 - Other Expenses
Cash Discount Account: 52600 - Cash Discount

On the form toolbar, click Save.
You can now specify in the preference settings that this is the default vendor class, in addition to specifying other basic settings that will be applicable in accounts payable. For details, see Accounts Payable: To Specify Accounts Payable Preferences.

Activity Recap

In this activity, we have illustrated how to create a vendor class, specify the default financial settings for it, and specify the required GL accounts used by this class.

Accounts Payable: To Specify Accounts Payable Preferences

In this activity, you will learn how to specify the basic settings to be used in accounts payable.

Story

Suppose that as an administrator, you need to define preference settings for the accounts payable functionality. You need to specify the default vendor class and other settings that will make it easier for users to create AP documents.

Process Overview

In this activity, on the Accounts Payable Preferences (AP101000) form, you will specify accounts payable preferences.

Step: Specifying the Accounts Payable Preferences To specify the required and recommended settings that apply to accounts payable, do the following:

Sign in to the company you have prepared with the admin username.
Open the Accounts Payable Preferences (AP101000) form. Note that all the required settings (that is, those marked with an asterisk) have already been specified by default. Lesson 5: Configuration of Accounts Payable | 32
In the Posting Settings section of the General tab, make sure that the Automatically Post on Release check box is selected. With this setting, transactions related to AP documents will be automatically posted to the general ledger once they are released.
In the Data Entry Settings section of the General tab, specify the following settings, which simplify the processing of AP documents:

Default Vendor Class ID: DEFAULT
Hold Documents on Entry: Cleared
Require Approval of Bills Prior to Payment: Cleared
Validate Document Totals on Entry: Cleared
Require Vendor Reference: Cleared

On the form toolbar, click Save.

Activity Recap

In this activity, we have illustrated how to set up accounts payable preferences—the data entry settings and the settings that aﬀect the posting and release of AP documents.

Vendors: General Information

Acumatica ERP provides you with diﬀerent tools that ease the process of entering vendor data and help you to organize this data in reports. You use the Vendors (AP303000) form to create vendors in Acumatica ERP.

Learning Objectives

In this lesson, you will do the following:

Create a new vendor based on the default vendor class
Review the default settings that the system has inserted from the vendor class

Applicable Scenarios

You add vendor accounts in the following cases:

When you initially configure Acumatica ERP and enter the vendor base into the system
When you need to create an account for a new vendor of the company

Entities Needed for Vendor Account Setup

Before you start setting up vendor accounts in Acumatica ERP, you need to configure the entities that will ease the processes of vendor account creation and maintenance. The needed entities in Acumatica ERP may include the following:

Vendor classes (required): You should ensure that at least one vendor class has been set up on the Vendor Classes (AP201000) form. Vendor classes provide default values for individual vendor accounts, so users can create vendor accounts more easily. Besides the class ID, which is the required setting of a vendor class, it can contain additional elements such as the description, credit terms, currency, rate type, country, tax zone, and specific general ledger accounts. You can also enter a default cash account and payment method for the class. For details, see Accounts Payable: To Create a Vendor Class.
Vendor identifiers (optional): You should make sure that the segmented key used as a template for identifiers of vendor accounts suits your needs, and adjust the BIZACCT segmented key (or the VENDOR Lesson 5: Configuration of Accounts Payable | 33
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    segmented key) on the Segmented Keys (CS202000) form if needed. For details, see Managing Segmented
    Keys.
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General ledger accounts (required): On the Chart of Accounts (GL202500) form, you need to create the general ledger accounts to be used to record purchases and cash discounts, unless you plan to use the accounts that already exist. You will need to select these accounts when you create vendor accounts. For details, see To Add an Account to the Chart of Accounts
Payment methods (required): You need to ensure that at least one payment method to be used for payments to vendors has been defined on the Payment Methods (CA204000) form. For details, see Managing Payment Methods.
Credit terms: You should ensure that each needed set of credit terms that will define the due dates of documents has been set up on the Credit Terms (CS206500) form. When you set up vendor classes, you can assign the appropriate credit terms to classes, which in turn will cause the credit terms to be assigned by default to all new vendors of this class. For details, see Setup of Credit Terms.
Mailings (optional): You can set up multiple mailings to notify vendors about their balances, bills, purchase orders, and other information you want to send to vendors on a regular basis. For details, see Mailings for Vendors: General Information.
Vendor price lists (optional): You can set up vendor price lists on the Vendor Prices (AP202000) form to maintain item prices that are specific for vendors, so that you can later use promotional prices and volume- based oﬀers when planning your purchases. For details, see Vendor Prices: General Information.
Vendor discounts (optional): On the Vendor Discounts (AP205000) form, you can set up and maintain vendor discounts based on information received from each vendor. For details, see Configuring Vendor Discounts.
Tax zones (optional): On the Tax Zones (TX206000) form, you can set up various tax zones that combine a group of taxes for a particular location, which you assign to vendors and which are used by the system for calculation of taxes when you enter vendor documents. For details, see Tax Zones and Categories: General Information.

Vendors: Vendor Defaults and Overrides

A vendor class groups vendors that have similar characteristics. You can divide vendors into classes based on the types of goods or services you purchase from them or on other properties, such as the vendors' currency and payment methods. For instance, you might find it useful to create one vendor class for tax agencies and another for 1099 vendors. You define vendor classes and their settings on the Vendor Classes (AP201000) form. You can then select the appropriate vendor class when you are creating a vendor account, which causes the system to fill in the values of the class for the vendor. Any of these default values can be overridden. Generally, any existing vendor class can be defined as the default vendor class. Aer you specify the default vendor class, when you create another vendor class, the system automatically inserts the values of the default vendor class, but any of them can be overridden. When you create a new vendor account, the default vendor class is initially specified as the vendor class, but you can change it to any other class.

Default Vendor Class

We recommend that you first create the vendor class that will contain the largest number of vendors (and thus the most common values) and specify it as the default vendor class on the General tab (the Data Entry Settings section) of the Accounts Payable Preferences (AP101000) form. Performing these steps will save you time when you create each additional vendor class, because the elements of the new class will be automatically populated with the values from the default vendor class, so that you have fewer values to enter. Also, when you create a new vendor account, by default, it will be assigned to the Default vendor class, so that in most cases, you won't need to select another vendor class. Lesson 5: Configuration of Accounts Payable | 34

Other Vendor Classes

You also create non-default vendor classes by using the Vendor Classes (AP201000) form. As mentioned above, when you create a vendor class, the system initially populates it with the values of the default vendor class, any of which can be overridden. You can create a new vendor class based on any existing vendor class by using commands from the Edit menu on the form toolbar of the Vendor Classes form. You can copy the settings of a particular vendor class and paste them to create another class, or you can create a template that you can use for multiple similar vendor classes. For details, see Copy-and-Paste Options and Record Templates.

Default Values Provided by a Vendor Class

A vendor class has only two required settings: class ID and description. For each class, you can decide which additional elements to use. You can select the credit terms, currency, rate type, country, tax zone, and specific general ledger accounts and subaccounts. You can also enter a default cash account and payment method for the class. When you create a new vendor account on the Vendors (AP303000) form, by default, the elements have the values that were specified for the default vendor class. If the new vendor should be assigned to a more specific class, select this class, which changes the default values. You can override any value, making it specific to the vendor. If you have to override many values similarly for multiple vendors, consider creating a new vendor class.

Default Currency Settings

For a vendor class, you can specify the default currency and the default currency rate to be used for vendor accounts. We recommend that you select a foreign currency for a vendor class only if most or all vendors of the class use this currency. If you want to allow override of the currency and the rate by default for all vendors of the class, select these check boxes for the vendor class on the Vendor Classes (AP201000) form: Enable Currency Override and Enable Rate Override in the Default Financial Settings section of the General tab. If all vendors of the class use the same currency, you can prohibit users from overriding the currency on vendor documents, thus reducing the chance of input errors related to the currency choice. If you may use a non-default currency and non-default rate type on individual documents for some vendors, you can allow currency and rate overriding for those vendors by selecting the Enable Currency Override and Enable Rate Override check boxes, respectively, on the Vendors (AP303000) form (in the Financial Settings section of the Financial tab).

Vendors: Implementation Activity

The following activity will walk you through the process of creating a new vendor.

Story

Suppose that SweetLife Fruits & Jams company has found a vendor, the CleanUp company that provides cleaning services and that agreed to sell its services on credit, with payments due in 30 days and a 3% discount if the services are paid within 10 days. Acting as a SweetLife administrator, you need to create the new vendor in the system.

Process Overview

In this activity, you will create a new vendor on the Vendors (AP303000) form. On the tabs of this form, you will specify the vendor's address and contact information. You will then review the default settings, which the system inserts to the vendor account when creating the vendor, and then specify the payment settings for the vendor. Lesson 5: Configuration of Accounts Payable | 35

Step 1: Creating a Vendor Account To create a vendor account, do the following:

Sign in to the company you have prepared with the admin username.
On the Vendors (AP303000) form, add a new record.
In the Summary area, specify the following settings:

Vendor ID: CLEANUP
Vendor Status: Active (inserted automatically)
Vendor Class: DEFAULT (inserted automatically)

On the General tab, in the Account Name box, specify CleanUp Co.

              The Legal Name box is filled in by default with the same value.

On the form toolbar, click Save to save your changes.

Step 2: Specifying Contact Information and Address To specify the vendor's contact information and address, do the following:

On the General tab, specify the following settings in the Primary Contact section:

Name: Loretta W Glenn
Job Title: General manager
Email: lglenn@cleanup.example.com
Business 1: 315-719-5308

In the Account Address section of the General tab, specify the following main address for the vendor:

Address Line 1: 893 Confederate Drive
City: Geneva
State: NY - New York
Postal Code: 14456

Step 3: Specifying Financial and Payment Settings To specify the financial and payment settings for the vendor, do the following:

On the Financial tab, in the Terms box, make sure that 310N30 is selected. This setting is inserted by default from the vendor class settings. The setting means that you will pay the net amount within 30 days or will take a 3% discount if you choose to pay within 10 days.
On the Payment tab, in the Default Payment Settings section, make sure that CHECK is selected in the Payment Method box and 10200 - Checking Account is selected in the Cash Account box.
In the Default Payment Settings section, specify the following settings:

Payment By: Discount Date
Payment Lead Time (Days): 3
Pay Separately: Cleared

On the form toolbar, click Save to save your changes. Lesson 5: Configuration of Accounts Payable | 36

Step 4: Reviewing the Default GL Accounts To review the default GL accounts of the vendor, do the following:

Open the GL Accounts tab.
In the boxes on this tab, review the GL accounts to be used for settlements with this vendor.

Activity Recap

In this activity, we have illustrated the following:

The administrator created a new vendor and specified its address, contact information, financial settings, and payment settings.
The administrator reviewed the GL accounts that the system had inserted by default in the vendor record.

Vendors: Related Reports and Inquiries

This topic describes the reports, inquiries, and forms you may review to gather information about vendors.

Reviewing Vendor Documents

You can review the vendor's documents at any time on the Vendor Details (AP402000) form. The form shows the selected vendor's documents and the balance calculated based on the documents. By default, the form shows all the vendor's open documents. You can also run this inquiry by clicking Vendor Details (under Inquiries) on the More menu of the Vendors (AP303000) form.

Reviewing Vendor Documents and Balance

You can review the open documents, applications, and vendor balances at the end of a period, grouped by vendor and AP account, by running the AP Balance by Vendor (AP632500) report.

Reviewing Vendor Balance

You can review the vendor balance, which you can further reconcile with the balance of the accounts payable GL account, by running the AP Balance by GL Account (AP632000) report. To reconcile the GL balance of the AP account with the vendor balance, you compare the balance obtained in this report with the trial balance for the same period.

Reviewing Vendor Balance History

You can review the history of the vendor's balance over a specified date range by running the Vendor History (AP652000) report.

Reviewing Vendor Documents in AP Register

To review the vendor documents that have been released (documents with the Open, Closed, and Reserved statuses), you run the AP Register (AP621500) report. Lesson 5: Configuration of Accounts Payable | 37

Reviewing Vendor Profile

To review the database information for a particular vendor, you run the Vendor Profiles (AP655500) report. You can also run this report by clicking Vendor Profile (under Reports) on the More menu of the Vendors (AP303000) form.

Reviewing Vendor Balances

To review a particular vendor with the balances, default currency, credit terms, tax zone, and other basic information, you run the Vendor Summary (AP655000) report. To review the vendor's outstanding balances, you use the Vendor Summary (AP401000) inquiry.

Non-Stock Item: General Information

Non-stock items are used for goods that you purchase from vendors or sell to customers but do not want to reflect in your company's inventory. Since non-stock items do not require tracking of quantities, you can maintain only standard costs and base price information for them. For each non-stock item, you can specify and periodically update purchase prices and sales prices. Also, you can specify the standard cost of a non-stock item, which can be used in purchase orders and accounts payable bills if the vendor price is not specified. You can use the same non- stock items in accounts payable, accounts receivable, inventory, purchase orders, service orders, and sales orders.

Learning Objectives

In this chapter, you will learn how to create a new non-stock item of the Charge type, with a standard cost.

Applicable Scenarios

You may need to create a non-stock item in any of the following cases:

When you initially configure Acumatica ERP with the Inventory feature disabled on the Enable/Disable Features (CS100000) form
When you are going to sell or purchase new goods

Types of Non-Stock Items Acumatica ERP supports the following types of non-stock items:

Non-Stock Item: A general type of non-stock item generally bought for internal needs or for using in sales but not for selling separately
Labor: A non-stock item mostly used as a source of general ledger accounts for recording sales of labor
Service: A non-stock item to designate service fees
Charge: A non-stock item that represents specific type of charges
Expense: A non-stock item that represents specific type of expense

Settings for Non-Stock Items You can maintain information about non-stock items and their properties by using the Non-Stock Items (IN202000) form available in accounts receivable and accounts payable. The list below describes some of the settings that you can provide for a non-stock item by using this form:

Inventory ID: Every non-stock item is assigned a unique identifier based on the INVENTORY segmented key. Lesson 5: Configuration of Accounts Payable | 38

     You can configure inventory IDs by specifying settings for the INVENTORY segmented key on the Segmented
     Keys (CS202000) form. For the key, you can define how many segments it is to have, what values may be
     used, whether these values should be validated, and whether auto-numbering should be used in one of the
     segments.
     If required, you can change the ID for any non-stock item manually by using the Non-Stock Items (IN202000)
     form.

Units of measure: For each non-stock item, you can select the unit of measure (UOM) used as base unit for the item and specify conversion rules for them and for other UOMs used for the item. You can select UOMs from the list of those available for the item class or type new UOMs manually. Note that every conversion rule is specified with respect to the UOM chosen as the item's base unit.
General ledger accounts: The general ledger accounts used for non-stock items are limited to sales accounts and expense accounts.
Valuation method: Only the standard cost method applies to non-stock items.
Price information: For non-stock items of all types, you can specify price classes and assign prices that become eﬀective on specific dates.
Attributes: You can track additional information for non-stock items by using the attributes functionality.

Non-Stock Item Costs To make it possible to enter the non-stock item cost and use it in the non-stock item price calculation, Acumatica ERP enables you to maintain standard costs for non-stock items. The standard costs are determined outside of the system by cost experts, and the values should include some of the indirect and direct costs allocated. You can specify the standard cost for a non-stock item as a pending cost by using the Price/Cost tab of the Non-Stock Items (IN202000) form. Along with the pending cost, you can specify a date when the cost will become eﬀective. Standard costs are defined with respect to the base unit of the stock item. If you want to update standard costs for non-stock items, use the Price/Cost tab of the Non-Stock Items form: Enter a pending cost and the date for the new cost, and on the More menu (under Other), click Update Cost. The system displays only the last cost and current cost. The historical costs that were eﬀective before the last cost are not stored in the database.

Non-Stock Item: Implementation Activity

The following activity will walk you through the process of creating a new non-stock item.

Story

Suppose that SweetLife Fruits & Jams company pays rent for its oﬀice facilities, which is a fixed amount paid every month. The amount the company pays is $4,800 a month starting from 1/30/2025. To make creation of documents easier for accountants, a new non-stock item for rent should be available in the system. Acting as a SweetLife administrator, you need to create the new non-stock item and specify the needed settings.

Process Overview

In this activity, you will create a non-stock item on the Non-Stock Items (IN202000) form. On the tabs of this form, you will specify the item's settings, such as type and units of measure. Finally, on the Price/Cost tab of the form, you will specify the unit cost for the item. Lesson 5: Configuration of Accounts Payable | 39

Step 1: Creating a Tax Category To create a tax category that is a required setting for a non-stock item, do the following:

On the Tax Categories (TX205500) form, add a new record.
In the Summary area, specify the following settings:

Tax Category ID: EXEMPT
Description: Exempt
Active: Selected

On the form toolbar, click Save to save your changes.

Step 2: Creating a Non-Stock Item To create a non-stock item, do the following:

On the Non-Stock Items (IN202000) form, add a new record and specify the following settings in the Summary area:

Inventory ID: RENT
Item Status: Active (selected by default)
Description: Rent

On the General tab, specify the following settings for the item:

Type: Charge
Tax Category: EXEMPT

In the Unit of Measure section of the General tab, select PIECE in the Base Unit box.
On the GL Accounts tab, in the Expense Account box, select 62900 - Rent or Lease Expense.
On the form toolbar, click Save.

Step 3: Specifying the Unit Cost for the Item To specify the unit cost for the non-stock item, do the following:

While you are still on the Non-Stock Items (IN202000) form, click the Price/Cost tab and specify the following settings in the Standard Cost section:

Pending Cost: 4800
Pending Cost Date: 1/30/2025

On the form toolbar, click Save.
On the More menu (under Other), click Update Cost. The cost you have specified is now eﬀective and is displayed in the Current Cost box and its eﬀective date has been set to 1/30/2025.

Activity Recap

In this activity, we have illustrated the following:

The administrator created a tax category that is required for a non-stock item.
The administrator created a non-stock item for rent, and specified its unit of measure and its GL account. Lesson 5: Configuration of Accounts Payable | 40
For the new non-stock item, the administrator specified the unit cost and updated the cost to make it eﬀective as of the current date. Lesson 6: Configuration of Accounts Receivable | 41