Blog Article

30 Apr

Learning About: Accounts Payable Scheduled Payments

We all look for ways to make our job easier and faster. Taking advantage of scheduled payments for payables will achieve that.

You may have made a purchase that allows you to make monthly payments to your vendor with or without having to pay interest. This may also be a lease that you have done for your purchase. In either case using the scheduled payment method will allow you to manage your payments more timely and efficiently. You can also determine what your interest and principal payments will be by using the amortization feature.

In the following example we have entered an invoice to our vendor in Dynamics GP for the purchase of a customized machine to use in our production plant. The total cost of this equipment is $150,000.000. We will show how we calculate the interest and principal using the compound method.

Purchasing>Transactions>Scheduled Payments.

In this window we will add our existing document for the $150,000.00. The document had already been posted to the vendor. We have selected Compound Interest for 36 months on a monthly basis. We have mapped the entries to the appropriate GL accounts for default entry.

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We have pushed the Calculate button to get our results. You will notice our monthly payment is $4,263.72.

We will now look at the Amortization window to see what our principal and interest entries will be. You can also see what your declining principle balance is at each month.

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When you have completed your entry you will Post it.   You will notice in the Inquiry window of the vendor there is the original invoice for $150,000.00. When the Scheduled Payment was posted it automatically created a Credit Memo to offset the invoice and record the Scheduled Payment.

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Now it’s time to make our payment.

Purchasing>Routines>Post Scheduled Payments.

Mark the first payment in the schedule and then click Post.

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You will notice when inquiring on the Vendor we see the Scheduled payment being reduced by $4,263.72 and an Invoice was created for $4,263.72. We can now issue a check to this vendor for that payment.

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NEXT MONTH AR SCHEDULED PAYMENTS.

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