Configure Accounts payable overview

Article
04/12/2024

This article describes the pages used to set up basic and optional functionality for Accounts payable. It also describes setup steps that you must complete before you start to set up Accounts payable.

Prerequisites for Accounts payable setup

Before you can set up Accounts payable, you must complete the following setup:

In the General ledger:
- If you plan to use payment journals, set up payment journals.
- If you plan to run exchange rate adjustments, set up currency codes on the Currencies page, set up exchange rate types on the Exchange rate types page, and set up currency exchange rates on the Currency exchange rates page.
In Cash and bank management, set up bank accounts to use with methods of payment.

Setup pages for Accounts payable

Use the following pages to set up the basic functionality of Accounts payable for each legal entity. The pages are listed in the recommended order of setup. To make the setup process easier, you can create templates from the first records that you create. In a template, values are typically entered in many fields to reflect the features that the organization wants to implement for a particular type of vendor.

On the Terms of payment page, define the terms of payment that you assign to sales orders, purchase orders, customers, and vendors, and that determine invoice due dates. For more information, see Define vendor payment fees.
On the Methods of payment - vendors page, create and maintain information about how the organization pays its vendors.
On the Vendor groups page, create and maintain groups of vendors that share important parameters for posting, settlement and payment, reporting, and forecasting.
On the Vendor posting profiles page, define how vendor transactions are posted to the general ledger.
On the Accounts payable parameters page, set up default settings that are applied if a more specific setting isn't specified, parameters for various kinds of functionality, and the various number sequences for Accounts payable.
On the Form setup page, define the format of various documents that are related to vendors, and that the organization uses to keep track of receipts from vendors and enter reasons for the flow of payments to vendors.
On the Vendors page, create and maintain vendor accounts, and also the tax authorities that your organization reports sales taxes to.

Optional setup pages for Accounts payable

In addition to the basic functionality, Accounts payable has other functionality that you can set up.

The additional setup pages are organized by functionality.

Policies

On the Vendor invoice policy page, set up vendor invoice policies.

Invoice matching

On the Invoice totals tolerances page, set up tolerances for invoice totals.
On the Matching policy page, set up two-way and three-way matching policies.
On the Price tolerances page, set up tolerances for unit prices.
On the Item price tolerance groups page, set up tolerance groups for item prices.
On the Vendor price tolerance groups page, set up tolerance groups for vendor prices.
On the Charges tolerances page, set up tolerances for charges.

Workflow

On the Accounts payable workflows page, set up workflow configurations for journal approvals and purchase requisitions.

Reasons

On the Vendor reasons page, set up reason codes.

Charges

On the Charges code page, set up codes for the charges that are used in purchase orders.
On the Vendor charges group page, create and maintain charges groups for vendors.
On the Item charge groups page, create and maintain charges groups for items.
On the Auto charges page, define the charges that are automatically assigned to orders.

Supplementary items

On the Supplementary item groups - Vendor page, create and maintain supplementary item groups for vendors.
On the Supplementary item groups - Inventory page, create and maintain supplementary item groups for items.

Distribution

On the Terms of delivery page, create and maintain the conditions for an item's transfer from seller to buyer.
On the Modes of delivery page, create and maintain the methods of transport that are used when an order is delivered from the seller to the buyer.
On the Destination codes page, create and maintain identifiers and descriptions for delivery destinations.

Forms

On the Form notes page, create the standard text that appears on various pages.
On the Form sorting parameters page, set up the sorting order for requisitions, receipt lists, packing slips, and invoices.
On the Print management setup page, set up print management information for originals and copies of pages.

Payments

On the Cash discounts page, set up and manage the terms for obtaining cash discounts. The cash discount codes are linked to vendors and are applied to purchase orders.
On the Payment schedules page, set up the payment schedules that are used to manage installment payments to vendors.
On the Payment days page, define the payment days that are used to calculate due dates, and specify payment days for a specific day of the week or month.
On the Payment fee page, create and maintain the payment fees that are associated with vendors.
On the Payment instruction page, create and maintain payment instructions.

Statistics

On the Aging period definitions page, set up user-defined intervals that are used to analyze the maturity distribution of vendor accounts.
On the Line of business page, create the line of business (LOB) codes that are assigned to vendors.

Tax 1099

On the 1099 fields page, verify and update the minimum amounts that must be reported to the Internal Revenue Service (IRS), based on the latest IRS requirements.

Optional setup for other modules

Organization administration

On the Number sequences page, set up number sequence groups for invoice numbers.
On the following pages, set up address information:
- Address setup
- NAF codes
- Import ZIP/postal codes

General ledger

On the Financial dimensions page, set up financial dimensions.
On the following pages, set up tax information:
- Sales tax codes
- Sales tax groups
- Item sales tax groups
- Account group
- Sales tax exempt codes
- Sales tax jurisdictions
- Sales tax authorities
- Sales tax settlement periods

Cash and bank management

On the Payment purpose codes page, set up the Central Bank purpose code.