DBD: Vendor Invoice Entry

Key Capabilities

• PO Integration: Vendor invoices received as the result of a purchase order are entered using the Purchase Order Receiving program. This integrates seamlessly with Order Entry, Purchase Order Entry, Accounts Payable Invoice Entry, and Accounts Receivable Billing.
• Expense Management: Use the Accounts Payable Invoice Entry program to manually enter payables for everyday operational expenses (e.g., rent, utilities, and employee expense accounts).
• Adjustments & Credits: Easily adjust previously entered or historical invoices within the same module.

Manual data entry is minimal across the three primary interface panels, as most fields automatically populate using data straight from the Vendor Master file or calculate automatically.

Invoice Entry Setup

When you launch the Invoice Entry program, the Fiscal Year and Accounting Period automatically default to the earliest unclosed period, and your cursor will be positioned at the Vendor Code field.

Follow these steps to set up a new invoice:

• Verify Period and Year: If you need to alter the default entries, click directly into the Fiscal Year or Accounting Period fields and select the correct timeframe from the dropdown list.
• Select the Vendor Code: Key in the unique vendor code manually, or click the Query tool to search and select it from the list.
• Enter the Invoice Number: Key in the vendor invoice number exactly as it appears on your physical document.

• Handle Duplicate Prompts: Invoice numbers must be unique. If you input a number that already exists, a system prompt will notify you that the invoice is already on file, giving you the opportunity to proceed and adjust it.
• Confirm the Record: Once you enter a new invoice number and press Enter, a prompt will ask you to confirm that the information is correct and that you wish to add the record. Click Yes to proceed.
• Input Date and Amount: After confirming the prompt, the system positions your cursor at the Invoice Date field. Accept the defaulted date or change it, then key in the total balance in the Gross Invoice Amount field.
• Processing Credit Memos: If you are entering a credit memo, key in the amount as a negative number. Use the dedicated application field to reference the specific original invoice number to which the credit should apply.

Navigating the Invoice Entry Panels

The Accounts Payable Invoice Entry screen utilizes three primary tabs to process the transaction. Most information automatically defaults from the Vendor Master file, minimizing manual data entry.

Panel 1: The Invoice Tab

This panel houses the baseline transaction details defaulted from the vendor file.

• Terms & Dates: The system automatically calculates the due date, applicable discounts, and discount dates based on the vendor's assigned terms code. You can manually override the Terms Code here to trigger a recalculation if necessary.
• Comments & References: The Invoice Comment defaults from the Standard Comment field in the Vendor Master. The Our Reference Number field tracks your purchase order number; if the invoice originated from a purchase order, this field populates automatically.
• Additional Fields: Any fields established in your Invoice Entry Options (such as Freight, VAT, or Use Tax**) will display here. If your invoice does not include freight or sales tax, simply click Next to bypass them.

⚙️ Configuring Line-Item Freight Exclusions from Discounts

By default, the system automatically excludes freight entered on an invoice header from the Discount Applies To calculation. However, if freight is entered as an order line item, you must configure an explicit system parameter for the system to recognize it.

Prerequisites:

• Invoice Entry Options: Special Amount 1 must be defined as Freight (Accounts Payable → Setup → System → System Setup → Invoice Entry Options).
• Vendor Master: The vendor record must not have a 1   flag in the Include Special Items in Discount field.
• Discount Toggle: Special Amount 1 must be set to N for Allow Discount?.

Activating the Feature:

• Navigate to the A/P Parameter Setup III Screen.
• Set the following parameter to Y: Include order line freight when excluding from discount? Y  

How it works: When active, if an order line is received as an "S" (Special) type, the system reads the O/P Special Charge file. If it is classified as freight, the system tracks the Invoiced Now extension amount and automatically subtracts it from the discountable total on Panel 1.

Panel 2: Miscellaneous Options & Invoice Types

While rare, you can access the middle tab by clicking Back from the General Ledger tab to adjust specific payment or billing parameters:

• Invoice Types: The dropdown list features five options: Invoice, Return, Adjustment, Debit Memo, or Credit Memo. The system defaults to Invoice. If you enter a negative gross amount, it automatically switches to Credit Memo. If you are modifying an existing invoice, select Adjustment.
• Payment Holds: Check the Hold box to prevent an invoice from being automatically pulled during standard check processing.
• Alternate Bank Codes: Use this field to route an invoice to a non-primary account—such as directing a specific invoice to be paid out of an alternate Bank Code if it is designated for a credit card or unique payment method (e.g., ACH).
• Credit Memo Tracking: When entering a vendor Credit Memo, input the original invoice number into the Apply to Invoice Number field for tracking and informational purposes.

Panel 3: The General Ledger Tab

The navigation automatically routes you to the final tab, where the system has already generated the standard general ledger posting.

• Accepting the Default: If the auto-populated distribution is correct, simply click Finish to save and immediately begin entering the next vendor invoice.
• Modifying Distributions: If you need to alter the financial routing, click directly on the GL distribution line. From here, you can modify the GL account, adjust the split amounts, or add, delete, and insert new distribution lines.

** Accruing and Tracking Use Taxes

If a vendor has not invoiced you for sales tax but you are legally required to accrue and remit Use Tax on the purchase, use the following setup and entry procedure.

1. System Setup Required (One-Time)

• GL Account Setup: Create two new General Ledger accounts:
  • Use Tax Expense   (Debit account)
  • Accrued Use Tax   (Credit liability account)
• Invoice Entry Options: Accounts Payable → Setup → System → System Setup → Invoice Entry Options. Assign an unused special amount field to collect Use Tax data. Check both Post G/L (to automatically debit your new Use Tax Expense account) and Allow Discount (so the system does not mistakenly reduce the total invoice amount like it does with freight).

2. Invoice Entry Procedure (Panel 1)

During regular A/P Invoice Entry, input the amount of Use Tax you wish to accrue into your designated Use Tax field on Panel 1. Note: Gross Inv Amt is the amount of the vendor invoice. It DOES NOT include sales tax. If they were invoicing you for sales tax, you would not have to accrue for Use Tax.

3. Critical General Ledger Overrides (Panel 3)

When you navigate to the General Ledger tab, the system will automatically generate a dynamic balancing line, but it requires a manual override to route the liability correctly:

1. Override the Expense Default: The system will default the inventory/expense line to a net amount The Rule: Manually override the default expense line to equal the Invoice Total minus Freight only. Do not let the system subtract the use tax amount from this specific line asset.
2. Add the Liability Line: Insert a new GL line utilizing your Accrued Use Tax liability account. The system will automatically default the correct remaining amount as a Credit.

Final G/L Posting Impact Example ($100 Invoice + $7 Use Tax):

• DR: Standard Expense/Inventory Account — $90.00  
• DR: Use Tax Expense Account (Auto-Generated) — $7.00  
• CR: Accounts Payable Liability — $100.00  
• CR: Accrued Use Tax Liability (Manually Added) — $7.00  

💡 Best Practice: Use your GL Detail report for the Use Tax Expense Account to track total amounts owed to your taxing jurisdiction. When cutting a check to pay the tax authority, ensure you debit the Accrued Use Tax liability account to clear the balance.