AP Bill Payments: Processing of Cash Purchases

Cash purchases are internal payment documents you can create for non-stock goods or services immediately paid by cash by using the Cash Purchases (AP304000) form. On this form, you specify the vendor and the details of purchased items. Payment should be made by a payment method based on Cash/Check or Credit Card.

Data Entry of Cash Purchases

You create cash purchases by using the Cash Purchases (AP304000) form.

On this form, you specify the date, the vendor, and the vendor location, and you select a payment method available for this vendor. On the Details tab, you can enter one summary line or any number of detail lines. For each detail line, you can specify a particular non-stock item or service.

If the payments of the selected payment method will be processed by a bank, the bank may apply finance charges. On the Charges tab, you can add these charges and specify their particular amounts for the payment.

Expense Reclassification

If expense reclassification is performed as a separate stage of document processing in your system, you can set up the workflow so that the users who enter cash purchases into the system will pre-release them, and later the authorized accountants will perform expense reclassification—that is, assign correct expense accounts (and subaccounts) and finally release them. For more information, see Configuring the Reclassification of Expenses.

Statuses of Cash Purchases

Each cash purchase has one of the following statuses, which tells you its stage in processing:

• On Hold: Generally, this status is used for a cash purchase that is a draft. This is the default status for new documents if the Hold Documents on Entry check box is selected on the Accounts Payable Preferences (AP101000) form or if approvals have been configured for cash purchases. A cash purchase with the On Hold status can be edited. After editing is completed, you can take the cash purchase off hold if all the required data has been entered.
• Pending Approval: If approvals have been configured for cash purchases, the cash purchase is assigned this status after you take it off hold; it needs to be approved by responsible approvers assigned according to the approval map specified on the Approval tab of the Accounts Payable Preferences form.
• Rejected: If approvals have been configured for cash purchases, this status indicates that the cash purchase has been rejected by at least one assigned approver. You can delete a document with this status or click Hold on the form toolbar, edit the document, and again submit it for approval.
• Pending Print: If printing is required, the system assigns a cash purchase this status after it has been taken off hold or approved (if required); the status indicates that the cash purchase has not been printed yet. You can print it on the Process Payments / Print Checks (AP505000) form, which you open by clicking Print/Process (under Processing) on the More menu.
• Printed: If printing is required by the payment method, after the cash purchase is taken off hold and has been printed, the system changes the status of the cash purchase to Printed. A cash purchase with this status can be released.
• Balanced: The status means that the cash purchase can be released.
• Pre-Released: The status indicates that the cash purchase has been pre-released and requires expense reclassification. (This status is used only if the Expense Reclassification feature is enabled on the Enable/Disable Features (CS100000) form.)
• Closed: This status reflects that the cash purchase has been released.
• Voided: This status indicates that the cash purchase has been voided.

Using Payment Methods Based on Checks

Cash purchases for different vendors are paid by using different payment methods. Although usage of checks (which allow the specified payee to order a payment of money from your company bank account) has recently declined significantly, you can configure payment methods that require the printing of checks. For more details, see To Print Checks. If cash purchases are paid by a payment method that requires check printing, the cash purchases may be released only after they have been printed.

For details on printing checks, including MICR (Magnetic Ink Character Recognition)-encoded checks, see To Print Checks.

Release of Cash Purchases

On release, a cash purchase generates a batch of the following accounting transactions.

Applying Direct-Entry Taxes to Cash Purchases

On the Cash Purchases (AP304000) form, a direct-entry tax is applied to a document if both of the following conditions are met:

• The vendor's tax zone includes the direct-entry.
• The tax category selected in the document line contains the direct-entry tax and has the Exclude Listed Taxes check box cleared on the Tax Categories (TX205500) form.

For a direct-entry tax, the following columns cannot be edited on the Taxes tab of the Cash Purchases form: Taxable Amount, Tax Amount, Tax Rate, and Expense Amount; also, the Deferral Code column on the Details tab cannot be edited.

You cannot manually delete a direct-entry tax from the Taxes tab by selecting the row with the tax and clicking Delete Row on the table toolbar. To delete a direct-entry tax, on the Details tab, you should change the tax category for the document line or delete the document line with the tax.

If a cash purchase with a direct-entry tax line is voided, the voided cash purchase is created with the same direct-entry tax line and tax amount.

If the Net/Gross Entry Mode feature is enabled on the Enable/Disable Features (CS100000) form, the tax calculation mode selected for the cash purchase on the Financial tab (Tax and Terms section) of the Cash Purchases form does not affect the tax calculated for the line with a direct-entry tax.

For details on direct-entry taxes, see Direct Tax Payment: General Information.