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Paying Suppliers

The payment run pays posted supplier bills in one pass: it proposes what is due by a date, grouped by supplier, you tick what to pay, and each supplier gets one payment allocated to the bills it settles. Settled bills move to Paid by themselves, and a remittance advice can be printed or e-mailed for each payment.

Where to find it

Admin Panel → Purchasing:

  • Purchasing — the Pay suppliers tab (shown to Payables and Finance) and the Suppliers tab

Who does what

Paying is split between two desks on purpose. Holders of ERP: Payables key and post the bills and can review the payment proposal. Releasing the money needs ERP: Finance and post access to the company, because payments post to the ledger. A clerk who could both enter a supplier's bill and pay it could pay a bill they invented. A Payables user without Finance sees the proposal with the note that payments are released by Finance.

Making a payment run

  1. Open Purchasing → Pay suppliers. Choose the Company and the Due by date, and press Show bills.
  2. The summary shows what is owed and what is not yet due. Below it, each supplier's posted bills are grouped by currency, with the Bill, Supplier's no., Due and Owed, any unallocated credit, and the proposed total. Bills due by the date are ticked.
  3. Untick what you do not want to pay, or change Pay now to pay part of a bill.
  4. Enter the Payment date, choose From bank account, and optionally a Run reference (letters, numbers, dots or dashes). Each payment's bank reference is the run reference plus the supplier code; without one, the run is called PAY- followed by the date.
  5. Press Pay selected bills.

Each supplier gets one payment journal that debits the payables control account and credits the bank, allocated to the ticked bills in the same step. Bills settled in full move to Paid. The result says how many payments were recorded and names any supplier that was not paid, with the reason. Pressing the button twice does not pay twice: the second attempt is reported as already recorded.

Suppliers on hold and other currencies

  • On hold: a supplier on hold is shown but not paid, with "Release the hold on the Suppliers tab first". Only Finance or ERP administration can release a hold.
  • Another currency: bills in a foreign currency are paid in that currency from the bank you choose, at the day's spot rate, and the screen shows the approximate value in the company's currency. The difference from the rate each bill was booked at is posted as a realised exchange gain or loss. With no rate for today the group says so and cannot be paid until one is added.

Remittance advice

After a run, each payment has a Remittance advice link. It opens a Print and send panel: print the advice, save it as a PDF, or e-mail it to the supplier's Contact e-mail. Printing needs read access to the company; sending needs ERP: Payables or ERP: Finance and write access. The advice lists the bills the payment settled.

Bills settled elsewhere

A bill settled outside the run, for example allocated in the ledger or matched on a bank feed, is brought to Paid the next time the run is used, so the proposal never offers a bill twice.

What goes wrong

  • "Nothing is owed by this company on its payables ledger": no bills are posted. Bills appear once they are posted.
  • "Payments are released by Finance": you hold Payables without Finance. Pass the proposal on.
  • "Payments post to the ledger - you need posting rights to this company": you hold Finance but only write access.
  • A supplier is skipped as on hold: release the hold first, if appropriate.
  • A foreign group cannot be paid: add today's exchange rate.

Worked example

On Thursday the payables clerk shows bills due by the following Tuesday for the UK company: twelve suppliers, one on hold. They check the proposal and ask the Finance manager to release it. The Finance manager opens Pay suppliers, unticks one disputed bill, sets the payment date to Friday, chooses the main current account, enters the run reference PAY-W41 and presses Pay selected bills. Eleven payments are recorded; the held supplier is listed as not paid. The Finance manager opens each payment's remittance advice and e-mails it.

Recommendations

  • Keep Payables and Finance in different groups; the split is the control.
  • Use a run reference per run so bank statement lines are easy to match.
  • Send remittance advice for every run; suppliers allocate faster.
  • Keep exchange rates current if you pay in other currencies.