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.
-
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 |
