Implement Accounts Payable

There are several steps involved in implementing Accounts Payable.

System Initial Setup

The first step in implementing Accounts Payable is to configure the system by setting four relevant options in System Initial Setup:

• Cash or Accrual: The basis of accounting that your organization uses.

  Note: Refer to System Initial Setup – Accounts Payable for more information on setting these options.

If you select the Accrual method of accounting, FIMS will create General Ledger Journal entries to debit Expense accounts and credit the A/P account each time you post a Voucher. When you print checks, the system will create Journal entries to debit the A/P account and credit the Cash account.

If you select the Cash method of accounting, FIMS will only create General Ledger Journal entries when you print checks. These entries will debit Expense accounts and credit the Cash account. The same basis must be used for Grant and for Administrative expenses.

• Post Grants to A/P as Held: If you select this option, Voucher entries from the Grant module will automatically be placed on hold when they are posted. You will have to manually take these items off hold for payment before you can print checks.

Refer to Setting Grant Payments as Held in Accounts Payable in the Grantee and Grant Management module for more information on setting this option.

Note: You can override the default setting on a case-by-case basis from the Grantee and Grant Management module before you post your Grants.

• Post (Admin.) Vouchers as Held: If you select this option, administrative Vouchers will automatically be placed on hold when you post them to Open Items. You will have to manually take these items off hold for payment before you can print checks.

NOTE: If Vouchers are not posted as held, they will be paid when checks are written based solely on the Due Date.

• Interface A/P with G/L: If you select this option, Accounts Payable transactions that normally update General Ledger will do so automatically. For certain purposes, such as the initial conversion (when Open Items that are already posted to General Ledger are entered) this interface should be turned off to prevent General Ledger from being updated twice.

Although the Accounts Payable module can be used without the General Ledger, it is rare to do so. Your General Ledger should be in place and ready to receive transactions before you use the Accounts Payable module. For administrative accounts payable, this means that the appropriate General Ledger cash (checking), liability (Accounts Payable), and expense accounts must be built for the operating fund.

Note: If you operate on a cash basis, you will not need a payable account.

Vendor Setup

• Create a Vendor Class record. Each Vendor Class record includes fields to enter the default Cash and Accounts Payable G/L accounts, which will automatically be placed on the Line Items tab during Voucher entry.

• Establish Administrative Vendors. A Profile with a Vendor record must be added for each Vendor. The Vendor record holds Vendor specific information, such as whether or not the vendor should receive a 1099, and the default General Ledger expense account for the vendor.

• You can enter a Terms Code. Each Terms code includes a discount percentage, discount period, and due period, which is automatically reflected on the Voucher entry screen.

General Ledger Beginning Balances

If you are initiating General Ledger at the beginning of your fiscal year, the beginning balance includes any balance in administrative Accounts Payable, and any other liabilities (for example, Taxes Payable). If there are administrative Accounts Payable items, there need to be corresponding Open Items in A/P.

When you implement FIMS’ financial modules for the first time, you must make sure that the total amount of the administrative open items (payables) equals the total amount in the General Ledger for Accounts Payable (if you are using the Accrual method of accounting). For example, if the balance of the General Ledger Accounts Payable account is $10,100 then the total of the administrative open items must also be $10,100. In other words, the subsidiary ledger must balance with the General Ledger control account.

Administrative Vouchers can be entered with the interface to G/L turned off to achieve this balance. Refer to Activating the Interface to General Ledger for more information about this option.

You can use the Payment Selection Report to determine if the necessary Vouchers have been entered and posted (select only administrative Vouchers). Use a due date far enough in the future to pick up all open items. Refer to Running the Payment Selection Report for more information on this report.

Balancing Grants Payable with General Ledger requires a slightly different technique. The payables should also correspond with Grant History – the financial modules must reflect historical Grants (voted during a time period prior to initiating the FIMS General Ledger) that have either not been paid at all or have remaining payments (for example, multi-year Grants).

When you enter historical Grants into the Grant Management module, make sure the Interface from Grants Posting to A/P checkbox is cleared in System Initial Setup so automatic Voucher entry does not occur.

Since in most cases at least part of the Grant has already been paid, this is for the best, but it still leaves the task of introducing remaining payments into the payable file. Several special utilities are available to help with the process of entering Grant Vouchers and linking them to existing Grant history.

Please contact FIMS Support for more information on these utilities and how to use them. You can also refer to Creating A/P Open Items for Unpaid Historic Grants for more information.