Managing AP Invoices

This guide covers the day-to-day workflow for handling accounts payable invoices.

Creating AP Invoices

Manual Entry

1. Navigate to ERP > AP Invoices and click New Invoice
2. Select the Supplier from the supplier list
3. Enter the supplier's Invoice Number and Invoice Date
4. Set the Due Date for payment
5. Add line items with cost types and amounts
6. Save as Draft

From Purchase Orders

AP invoices can be linked to existing purchase orders:

1. When creating an AP invoice, select a Purchase Order
2. Line items from the PO are pre-populated
3. Verify amounts against the supplier's invoice
4. Adjust quantities or prices if they differ from the PO

This linkage enables three-way matching between the PO, goods receipt, and supplier invoice.

Approving Invoices

Draft invoices must be approved before they can be paid:

1. Review the invoice details and line items
2. Verify the amounts match the supplier's invoice
3. Click Approve to move the invoice to Open status

Once open, the invoice appears in payment queues and aging reports.

Recording Payments

Full Payment

1. Open an Open invoice and click Record Payment
2. Enter the payment amount (defaults to the full balance)
3. Select the payment date and method
4. The invoice status changes to Paid

Partial Payment

1. Open the invoice and click Record Payment
2. Enter the partial amount
3. The payment status changes to Partially Paid
4. The remaining balance is tracked on the invoice
5. Record additional payments until fully settled

Landed Cost Calculations

When goods arrive with additional costs (shipping, customs, insurance), these costs can be allocated across the product items:

1. Create an AP invoice with the ancillary cost line items
2. Assign the appropriate Cost Type to each line (Shipping, Customs, Insurance, etc.)
3. Link the invoice to the related purchase order
4. The system distributes ancillary costs across the product items proportionally

This updates the effective cost of inventory items, ensuring accurate cost-of-goods-sold calculations.

Aging Reports

The AP aging report shows outstanding invoices grouped by age:

Use aging reports to:

• Prioritize payments to avoid late fees
• Negotiate payment terms with suppliers
• Monitor cash flow commitments
• Identify disputed invoices that need resolution

Cancelling Invoices

To cancel a draft or open invoice:

1. Open the invoice and click Cancel
2. Provide a cancellation reason
3. The status changes to Cancelled

Paid invoices cannot be cancelled. If a paid invoice needs to be reversed, create a debit note instead.