Applying Payments to Particular Lines of AP Documents
In many industries, organizations need to manage expenses and payments at a granular level—that is, down to the individual lines of accounts payable bills.
MYOB Acumatica provides the ability to pay accounts payable documents by individual lines. Users can now choose how they want to apply payments: fully (to the entire document), partially, or to individual document lines.
Configuration
- The Payment Application by Line feature must be enabled on the Enable/Disable Features (CS100000) form.
The Retainage Support feature should also be enabled on the Enable/Disable Features form to give users the ability to track retainage by individual document lines. For details, see To Enter a Bill with Retainage Paid by Line.
- To make the ability to apply payments to individual lines of accounts payable documents turned on by default for newly created vendors that are assigned to a particular vendor class, in the settings of this class, you can select the Pay by Line check box in the Default Financial Settings section on the General tab of the Vendor Classes (AP201000) form. If this check box is selected for a class, when you create a vendor and assign it to the class, the Pay by Line check box on the Payment tab of the Vendors form is selected by default, but it can be cleared for a particular vendor, if needed. (The vendor setting is then used as the default setting for the AP document, as described later.)
- To give users the ability to apply payments to individual lines of accounts payable documents of particular vendors, you need to select the Pay by Line check box in the Default Payment Settings section on the Payment tab of the Vendors (AP303000) form. If a vendor with this check box selected is specified for a bill on the Bills and Adjustments (AP301000) form or on the Tax Bills and Adjustments (TX303000) form if the vendor is a tax agency, the Pay by Line check box in the Summary area of this form is selected by default.
You can tailor the configuration of this capability to meet your organizational needs, enabling the Payment Application by Line feature and then turning on the ability to pay documents by line individually for the needed vendor classes and individual vendors.
Entry of Documents That Can be Paid by Line
When you are entering an AP document that can be paid by line, you either select a vendor for which the Pay by Line check box is selected or you select the Pay by Line check box for the document in the Summary area of the Bills and Adjustments (AP301000) form or the Tax Bills and Adjustments (TX303000) form if the vendor is a tax agency. Then you add lines to the AP document on the Details tab, specifying the inventory ID, project, project task, and cost code (if the Cost Codes feature has been enabled) for each line. The system assigns the line number to each line and displays it in the Line Nbr. column that appears in the table when the Pay by Line check box is selected for a document.
When preparing payments for such documents on the Prepare Payments (AP503000) form, in the table on the Documents to Pay tab, you select separate document lines. On payment application to a selected line, the system updates the line balance to show the open balance of the line after a payment is applied. After you release the payment, you can view the unpaid balance of the original document in the Balance box in the Summary area of the Bills and Adjustments or Tax Bills and Adjustments form.
This functionality is not supported for taxable documents that have a tax zone of an external tax providers selected for them in the Vendor Tax Zone box on the Financial tab of the Bills and Adjustments form.
Support of Taxes in AP Documents Paid by Line
MYOB Acumatica supports the ability to register and release AP documents with automatically calculated taxes (VAT, sales tax, and use tax) if these documents have the Pay by Line check box selected. For taxes at both the line level and the document level, the document tax amount is split proportionally between document lines and included in the line balance on document release. The tax totals are shown in the Tax Amount column, which appears on the Bills and Adjustments (AP301000) form after a document has been released.
The following table shows how the system treats taxes of each tax type. It indicates whether the taxes are included in the line balance (in this case, the Balance column would be the sum of the taxable amount and the tax amount) and whether they are shown in the Tax Amount column.
| Tax Type | Included in the Line Balance | Shown in the Tax Amount Column |
|---|---|---|
| VAT | Yes | Yes |
| Partially Deductible VAT | Yes | Yes |
| Reversed VAT | Yes, with the opposite sign | Yes, with the opposite sign |
| Sales Tax | Yes | Yes |
| Use Tax | No | No |
When an AP document is posted to the general ledger, the Use Tax Expense Account check box on the GL Accounts tab of the Taxes (TX205000) form is selected for all use and sales taxes included in the AP document, and the system inserts the project, project task, cost code, inventory ID, and account values for each line's tax amount posted to the tax expense account specified for the tax ID if the tax expense account is included into an account group.
For details on configuring a sales tax used in the AP subledger, see Sales Taxes: To Configure a Sales Tax for Use in AP.
Processing of Cash Discounts
If a cash discount for early payment applies to an AP document for which individual lines can be paid, the cash discount is distributed proportionally among the lines of the document. The discount amounts for each line are displayed in the Cash Discount Balance column on the Bills and Adjustments (AP301000) form. The rounding difference in the calculated cash discount is included in the line with the highest amount.
If a document that has been paid by individual lines includes a cash discount for early payment, this cash discount is distributed proportionally among the lines of the document, with the amounts shown in the Cash Discount Taken column on the Documents to Apply tab of the Checks and Payments (AP302000) form. In this column, you can edit the cash discount taken for a particular line. The original bill displays the difference between the calculated cash discount and the cash discount taken in the Cash Discount Balance column for a particular line.
Processing of Debit Adjustments
Debit adjustments created in the system automatically by reversing a document cannot be applied by line. In other words, for debit adjustments created automatically, on the Bills and Adjustments (AP301000) form, the Pay by Line check box in the Summary area will always be cleared and unavailable for editing.
Debit adjustments created manually on the Bills and Adjustments form can be applied by line. For such debit adjustments, the Pay by Line check box in the Summary area can be selected. For details, see To Enter a Debit Adjustment that Can Be Applied by Line.
Lines with Negative Amounts in AP Documents Paid by Line
On the Bills and Adjustments (AP301000) form, AP documents with the Pay by Line check box selected can have lines with the negative amount in the Ext. Cost, Retainage Amount, and Amount columns on the Details tab.
Such documents can be released if their balance is greater than or equal to 0.00.
On reversal of an AP document with a negative amount in a line, a related document is created with the same signs of amounts in the document lines.
For for bills and debit adjustments that have lines with a negative amount, the cash discount amount will also be negative. The cash discount is specified for a document line in the Cash Discount Balance column on the Details tab of the Bills and Adjustments form.
For the document with a cash discount to be released, the total cash discount shown in the Cash Discount box in the Summary area must be greater than or equal to 0.00. When such a document is applied to a payment on the Checks and Payments (AP302000) form, the amount in the Cash Discount Taken column for a line with a negative amount can be less than or equal to 0.00.
Process Overview
When you create a payment for particular lines of a bill, the process unfolds as follows:
- On the Bills and Adjustments (AP301000) form, you create a bill, selecting the Pay by Line check box in the Summary area, and then adding multiple lines to this bill. For details, see To Enter a Bill that Can Be Paid by Line (with Items' Quantities and Unit Costs). You then release the bill.
- Optional: On the Bills and Adjustments form, you create a debit adjustment with multiple lines. For details, see To Enter a Debit Adjustment that Can Be Applied by Line.
- You can create a payment on the Checks and Payments (AP302000) form. When you
need to pay multiple documents, you instead use the Prepare Payments (AP503000)
form. On either of these forms, you select lines of the bill and pay them in full or partially.
If a line of the bill is selected for payment but the payment has not yet been released, this
line cannot be selected in a different payment.
For details, see To Pay Separate Lines of an AP Bill (or Multiple Bills) and To Pay Multiple Lines of AP Bills.
- Optional: On the Checks and Payments or Prepare Payments form, you can also apply a debit adjustment to the payment to reduce the amount of the payment. On either of these forms, you select lines of the debit adjustment and pay them in full or partially. If a line of the debit adjustment is selected for payment but the payment has not yet been released, this line cannot be selected in a different payment.
- After you release the payment, the system assigns the original AP document the Closed status if it has been paid in full (or the document retains the Open balance if has been paid partially). The system updates the amounts paid in the payment on the Checks and Payments form and the balances of all the lines of the AP document on the Bills and Adjustments form.
Related Reports
When any of the following reports is generated, a payment of multiple document lines is presented in one line: Check Form (AP641000), Check Form with Remittance (AP640500), and Additional Remittance Form (AP642000).
Limitations
The following limitations apply to the functionality of applying payments to particular lines:
- In MYOB Acumatica, users currently cannot apply VAT recalculated on cash discounts to AP documents for which the Pay by Line check box is selected on the Bills and Adjustments (AP301000) form.
- Group and document discounts are not supported for AP documents that have the Pay by Line check box selected on the Bills and Adjustments form.
- A bill with the Pay by Line check box selected cannot be applied to a debit adjustment on the Applications tab of the Bills and Adjustments form. You should apply this debit adjustment to document lines on the Documents to Apply tab of the Checks and Payments (AP302000) form instead.
- The feature is not compatible with migration mode. If the Activate Migration Mode check box is selected in the Posting Settings section on the General tab of the Accounts Payable Preferences (AP101000) form, the Pay by Line check box on the Bills and Adjustments form is cleared and unavailable for editing.
- If the Invoice Rounding feature is enabled on the Enable/Disable Features (CS100000) form, the functionality of this feature is not applicable to documents that can be paid by line. That is, amounts in these documents cannot be rounded.
- Calculation of taxes in Avalara is not supported.