Organizations that include multiple companies can create and manage payments using a central company. This eliminates the need to enter the same transaction in multiple companies and saves time by streamlining the payment proposal process, the settlement process, open transaction editing, and closed transaction editing for cross-company payments.

In a centralized payments organization, each operating company manages its own invoices payable information and payments are generated from a central company, called the payment company. During the settlement process, the applicable due-to and due-from transactions are generated. You can specify which company within the organization will receive the realized gain or realized loss transactions, and how cash discount transactions that are related to a cross-company payment are handled.

The following examples illustrate how posting is handled in various scenarios. The following configuration is assumed for all of these examples:

  • The company accounts are Fabrikam, Fabrikam East, and Fabrikam West. Fabrikamis the payment company.

  • The field in the form is set to .

  • The field in the form is set to .

  • Fabrikam maintains a single global address book record, directory ID 1050, for Fourth Coffee. This global address book record is mapped to a separate vendor account in each company.

Directory ID

Vendor account

Name

Company

1050

3004

Fourth Coffee

Fabrikam

1050

100

Fourth Coffee

Fabrikam East

1050

3004

Fourth Coffee

Fabrikam West

Example 1: Vendor payment of invoice from another company

Fabrikam East has an open invoice for vendor account 100, Fourth Coffee. Fabrikam enters and posts a payment to Fabrikam vendor account 3004, Fourth Coffee. The payment is settled with the open invoice.

Invoice is posted in Fabrikam East for vendor 100

Account

Debit amount

Credit amount

Expense (Fabrikam East)

600.00

Accounts payable (Fabrikam East)

600.00

Payment is generated and posted in Fabrikam for vendor 3004

Account

Debit amount

Credit amount

Accounts payable (Fabrikam)

600.00

Cash (Fabrikam)

600.00

Fabrikam payment is settled with Fabrikam East invoice

Fabrikam posting

Account

Debit amount

Credit amount

Due from Fabrikam East (Fabrikam)

600.00

Accounts payable (Fabrikam)

600.00

Fabrikam East posting

Account

Debit amount

Credit amount

Accounts payable (Fabrikam East)

600.00

Due to Fabrikam (Fabrikam East)

600.00

Example 2: Vendor payment of invoice from another company with cash discount

Fabrikam East has an open invoice for vendor 100, Fourth Coffee. The invoice has a 20.00 cash discount available. Fabrikam enters and posts a payment of 580.00 for Fabrikam vendor 3004, Fourth Coffee. The payment is settled with the open Fabrikam East invoices. The cash discount is posted to the invoice company, Fabrikam East.

Invoice is posted in Fabrikam East for Fabrikam East vendor 100

Account

Debit amount

Credit amount

Expense (Fabrikam East)

600.00

Accounts payable (Fabrikam East)

600.00

Payment is generated and posted in Fabrikam for Fabrikam vendor 3004

Account

Debit amount

Credit amount

Accounts payable (Fabrikam)

580.00

Cash (Fabrikam)

580.00

Fabrikam payment is settled with Fabrikam East invoice

Fabrikam posting

Account

Debit amount

Credit amount

Due from Fabrikam East (Fabrikam)

580.00

Accounts payable (Fabrikam)

580.00

Fabrikam East posting

Account

Debit amount

Credit amount

Accounts payable (Fabrikam East)

580.00

Due to Fabrikam (Fabrikam East)

580.00

Accounts payable (Fabrikam East)

20.00

Cash discount (Fabrikam East)

20.00

Example 3: Vendor payment of invoice from another company with realized exchange rate loss

Fabrikam East has an open invoice for vendor 100, Fourth Coffee. Fabrikam enters and posts a payment for Fabrikam vendor 3004, Fourth Coffee. The payment is settled with the open Fabrikam East invoice. A currency exchange loss transaction is generated during the settlement process.

  • Exchange rate for EUR to USD as of the invoice date: 1.2062

  • Exchange rate for EUR to USD as of the payment date: 1.2277

Invoice is posted in Fabrikam East for Fabrikam East vendor 100

Account

Debit amount

Credit amount

Expense (Fabrikam East)

600.00 EUR / 723.72 USD

Accounts payable (Fabrikam East)

600.00 EUR / 723.72 USD

Payment is generated and posted in Fabrikam for Fabrikam vendor 3004

Account

Debit amount

Credit amount

Accounts payable (Fabrikam)

600.00 EUR / 736.62 USD

Cash (Fabrikam)

600.00 EUR / 736.62 USD

Fabrikam payment is settled with Fabrikam East invoice

Fabrikam posting

Account

Debit amount

Credit amount

Due from Fabrikam East (Fabrikam)

600.00 EUR / 736.62 USD

Accounts payable (Fabrikam)

600.00 EUR / 736.62 USD

Realized loss (Fabrikam)

0.00 EUR / 12.90 USD

Due from Fabrikam East (Fabrikam)

0.00 EUR / 12.90 USD

Fabrikam East posting

Account

Debit amount

Credit amount

Accounts payable (Fabrikam East)

600.00 EUR / 736.62 USD

Due to Fabrikam (Fabrikam East)

600.00 EUR / 736.62 USD

Due to Fabrikam (Fabrikam East)

0.00 EUR / 12.90 USD

Accounts payable (Fabrikam East)

0.00 EUR / 12.90 USD

Example 4: Vendor payment of invoice from another company with cash discount and realized exchange rate loss

Fabrikam East has an open invoice for vendor 100, Fourth Coffee. The invoice has a cash discount available and a sales tax transaction is generated. Fabrikam posts a payment for Fabrikam vendor 3004, Fourth Coffee. The payment is settled with the open Fabrikam East invoice. A currency exchange loss transaction is generated during the settlement process. The cash discount is posted to the invoice company (Fabrikam East) and the currency exchange loss is posted to the payment company (Fabrikam).

  • Exchange rate for EUR to USD as of the invoice date: 1.2062

  • Exchange rate for EUR to USD as of the payment date: 1.2277

Invoice is posted and a tax transaction is generated in Fabrikam East for vendor 100

Account

Debit amount

Credit amount

Expense (Fabrikam East)

564.07 EUR / 680.38 USD

Sales tax (Fabrikam East)

35.93 EUR / 43.34 USD

Accounts payable (Fabrikam East)

600.00 EUR / 723.72 USD

Payment is generated and posted in Fabrikam for vendor 3004

Account

Debit amount

Credit amount

Accounts payable (Fabrikam)

588.72 EUR / 722.77 USD

Cash (Fabrikam East)

588.72 EUR / 722.77 USD

Fabrikam payment is settled with Fabrikam East invoice

Fabrikam posting

Account

Debit amount

Credit amount

Due from Fabrikam East (Fabrikam)

588.72 EUR / 722.77 USD

Accounts payable (Fabrikam)

588.72 EUR / 722.77 USD

Realized loss (Fabrikam)

0.00 EUR / 12.66 USD

Due from Fabrikam East (Fabrikam)

0.00 EUR / 12.66 USD

Fabrikam East posting

Account

Debit amount

Credit amount

Accounts payable (Fabrikam East)

588.72 EUR / 722.77 USD

Due to Fabrikam (Fabrikam East)

588.72 EUR / 722.77 USD

Due to Fabrikam (Fabrikam East

0.00 EUR / 12.66 USD

Accounts payable (Fabrikam East)

0.00 EUR / 12.66 USD

Accounts payable (Fabrikam East)

11.28 EUR / 13.61 USD

Cash discount (Fabrikam East)

11.28 EUR / 13.61 USD

Example 5: Vendor credit note with primary payment

Fabrikam generates a payment of 75.00 for vendor 3004, Fourth Coffee. The payment is settled with an open invoice for Fabrikam West vendor 3004 and an open credit note for Fabrikam East vendor 100. The payment is selected as the primary payment in the open transaction editing form.

Invoice is posted to Fabrikam West for vendor 3004

Account

Debit amount

Credit amount

Expense (Fabrikam West)

100.00

Accounts payable (Fabrikam West)

100.00

Credit note is posted to Fabrikam East for vendor 100

Account

Debit amount

Credit amount

Accounts payable (Fabrikam East)

25.00

Purchase returns (Fabrikam East)

25.00

Payment is posted to Fabrikam for vendor 3004

Account

Debit amount

Credit amount

Accounts payable (Fabrikam)

75.00

Cash (Fabrikam)

75.00

Fabrikam payment is settled with Fabrikam West invoice and Fabrikam East credit note

Fabrikam posting

Account

Debit amount

Credit amount

Accounts payable (Fabrikam)

25.00

Due to Fabrikam East (Fabrikam)

25.00

Due from Fabrikam West (Fabrikam)

100.00

Accounts payable (Fabrikam)

100.00

Fabrikam East posting

Account

Debit amount

Credit amount

Due from Fabrikam (Fabrikam East)

25.00

Accounts payable (Fabrikam East)

25.00

Fabrikam West posting

Account

Debit amount

Credit amount

Accounts payable (Fabrikam West)

100.00

Due to Fabrikam (Fabrikam West)

100.00

Example 6: Vendor credit note without primary payment

Fabrikam generates a payment of 75.00 for vendor 3004, Fourth Coffee. The payment is settled with an open invoice for Fabrikam West vendor 3004 and an open credit note for Fabrikam East vendor 100. The payment is not selected as the primary payment in the open transaction editing form.

Invoice is posted to Fabrikam West for vendor 3004

Account

Debit amount

Credit amount

Expense (Fabrikam West)

100.00

Accounts payable (Fabrikam West)

100.00

Credit note is posted to Fabrikam East for vendor 100

Account

Debit amount

Credit amount

Accounts payable (Fabrikam East)

25.00

Purchase returns (Fabrikam East)

25.00

Payment is posted to Fabrikam for vendor 3004

Account

Debit amount

Credit amount

Accounts payable (Fabrikam)

75.00

Cash (Fabrikam)

75.00

Fabrikam payment is settled with Fabrikam West invoice and Fabrikam East credit note

Fabrikam posting

Account

Debit amount

Credit amount

Due from Fabrikam West (Fabrikam)

75.00

Accounts payable (Fabrikam)

75.00

Fabrikam East posting

Account

Debit amount

Credit amount

Due from Fabrikam West (Fabrikam East)

25.00

Accounts payable (Fabrikam East)

25.00

Fabrikam West posting

Account

Debit amount

Credit amount

Accounts payable (Fabrikam West)

75.00

Due to Fabrikam (Fabrikam West)

75.00

Accounts payable (Fabrikam West)

25.00

Due to Fabrikam East (Fabrikam West)

25.00

See Also