Invoice types in Accounts payable
The procedure for handling incoming invoices varies from company to company, depending on the company's size, structure, and organization. Typically, the invoices have one of the following statuses:
Registered
Approved
Paid
Finance supports several methods for companies to manage incoming invoices to cater to different company procedures. The system has a different invoice journal depending on the company's needs. The following types of invoices are available:
Invoice register and approval
Invoice journal
Vendor invoices
Invoice register
The purpose of the invoice register journal is to preregister invoices when they arrive at the company and transfer them to an invoice pool for approval. In the invoice register journal, an employee registers the following information:
Vendor account
Invoice number
Amount
Person who approves the invoice
The same employee validates and posts the journal to the specified accounts in the posting profile. Usually, the accounts are pending accounts where the amounts require manual approval and reclassification by the person who's specified in the journal line.
For security reasons, only one user at a time can enter lines in a journal.
After you enter all invoice journal lines, select the Post button to post the invoice journal. To access the Invoice register page, go to Accounts payable > Invoices > Invoice register.
The following posting options are available when you're working with invoice registers in the application:
Post and transfer - Post lines that don't have errors and transfer lines that have errors to a new journal.
Post - Post the selected lines. If an error exists, the system doesn't post lines and an error message displays.
When posting the journal lines, you transfer them to an invoice pool. In an invoice approval journal, you can transfer the journal lines from the invoice pool into the invoice approval journal.
Invoice pool and approval journal
After you post the lines of the invoice register, the postings display in the invoice pool.
To view the postings in the invoice pool, go to Accounts payable > Invoices > Invoice pool.
The invoice pool displays relevant information about the invoices awaiting approval.
Scenario
April, the accounts payable clerk, registers an incoming invoice in the invoice register and then posts the registration. April sends the physical invoice to Phyllis, the accounting manager, for approval. Phyllis approves the invoice with a signature or a stamp and then returns the invoice to April. April registers and posts the approval in the invoice approval journal. Now, you can pay the invoice.
The invoice pool holds invoices that originate from a purchase order that in turn originate from an invoice register. Go to Accounts payable > Invoices > Invoice pool and then select the Purchase order button to select and approve the purchase orders.
You can use Accounts payable > Invoices > Invoice approval to view all registered invoices that are assigned to you. Then, you can select one, multiple, or all to add to the invoice approval journal.
Next, you should verify the expense accounts for each voucher and then post the journal.
When you use this approach, Finance reverses the transactions in the invoice pool and then updates the vendor summary account. In the posting profile, this vendor summary account is assigned to the vendor account that April, the accounts payable clerk, previously assigned to a registered voucher.
Invoice journal
You can enter invoices directly into the invoice journal. By default, the signed-in user who enters the journal lines approves the invoices.
The invoice journal is designed for users to enter the invoices that they receive from vendors that aren't related to purchase orders. Typically, these invoice types would be for expensed, nonstocked goods. After the user enters the incoming invoices, they can post. You can view and use the invoice journal by going to Accounts payable > Invoices > Invoice journal
Scenario
April, the accounts payable clerk at Contoso, enters the invoice directly into a new invoice journal and then approves and posts the journal. Now, you can pay the invoice.
The following video demonstrates how to use the invoice journal.
Accrued purchases excluding sales tax report
The Accrued purchases report displays details about the product receipts that you enter and post, but don't invoice, as of the cutoff date that you specify. The report contains data that you can use to reconcile one or more accrued purchase accounts.
Invoice details display on the report when one of the following conditions is true:
The receipt transaction date is before or equal to the cutoff date, and the invoice transaction date is after the cutoff date.
The invoice transaction date is before or equal to the cutoff date, and the receipt transaction date is after the cutoff date.
You can use the Cutoff date for including corrected receipts field to generate the report based on the accounting date or the version date. This flexibility allows accounts payable clerks to better reconcile and account for information for accrued purchases.