Creditors management is necessary to ensure that the correct credit period is taken on invoices and that vendors do not have to waste your staff's time chasing funds. It is also essential to know what your outstanding indebtedness is so that you may manage your cash flow and make the money that you owe vendors to work hard for you to the last possible moment.
Creditors ledger is often regarded as a reverse of the debtors ledger and that a similar system is required. This is, in fact, not the case as a Balance Forward system is not at all suitable for this ledger. Creditors must be an open item process. The creditors ledger requires the entry of vendors invoices and to indicate on these when they are due for payment. Then to produce remittance advices and cheques (possibly in combination) with the security of cheque numbering and addressing and recording of which cheque for how much was paid to whom.
SERENADE is capable of accepting invoices from the Purchase Order module or directly in to the module, with or without the part details. The direct entries may be marked so that they are not paid until any disputes regarding them are resolved. This allows invoices to be entered then passed to the relevant person for payment clearance. Once cleared, then changing that setting allows the invoices (or part of them) to be paid and the system will then print remittance advices and the cheques or just produce a listing and allowing the cheques to be entered manually.
- A 6 character unique alphanumeric code for the vendor with 8 character 'look-up' for quickly finding the account.
- Individual creditor terms and discounts
- Pre-list payment schedule options with partial payment choices
- Ability to set for payment according to pre-defined priority codes
- Invoices may be in foreign currency
- Posting and invoice as uncleared/disputed to record it in to the system and later clear it for payment
- Stock update option on invoice entry
- Combination 'open item' and bulk setting for payment
- Manual override on the amount to be paid
- Exchange rate variances catered for
- Posting/Payment history retained for a variable number of periods
- Trial balance by weeks and cash flow forecast in association with purchase orders received but not invoiced
- Payment by Direct Credit creates a file for use with the automated banking systems
- Manual or system produced cheques possibly combined with remittance advices
- Free format remittance advice and cheques (as far as possible) with words and number option on cheques.
- Full audit trails and variety of reports
Invoices may be entered as a total values or include the item line. The system is capable of updating stock with these items/parts so that dual entry of data is avoided. This is particularly useful if there is no purchase order for some stock items that were purchased at short notice. When invoices are entered the disbursements to the general ledger are expected to be provided. If the invoice has not been cleared the system holds the value in a separate G/L account and disburses it from there when it is cleared and the person who cleared it has indicated the accounts involved. Invoices need to be cleared before they will be paid by the system.
The invoice postings to a vendor's account can be set as:
- Not yet cleared
- In dispute
- Clear for payment
- To be paid next payment process
- Manually paid
You can set all, or any part, of a posting value to any of the above.
Postings are either set for the system to pay them or are paid manually or can be a combination of both. The payment extract process then removes these items from the file and generates a payment entry for each account that is to be paid. The details of which postings were paid by which remittance are retained in the history file and may be kept for a set number of periods.
Postings to this ledger may be made directly from the purchase order module, or not, as required. If postings are to be made then the control system details must be set appropriately (use program SYS000). Creditors invoices for receipts for which a purchase order was generated must be matched with that purchase order. Invoices for indirect charges (e.g. window cleaning) or for stock items collected or delivered at short notice, for which there was no purchase order, may still be entered directly in to the creditors ledger.
Advanced payments may be matched against individual invoices on the vendor's account. If this is done then the account history is updated to show how much has been paid and the date and number of the cheque.
Payments (by system)
You may set amounts to be paid:
- In bulk (by vendor priority code and due date)
- All postings for a creditor
- By individual posting
The postings for payment (and advanced payments and matched items) are extracted and any statement discounts are calculated and a cheque number is allocated. If the payable total on an account is not a credit then the postings will be listed but not removed from the postings detail. The extract listing is part of the audit trail and should be retained.
Cheques and Remittances
The remittance advices and cheques are printed from the extracted postings. Even if an account did not have a cheque created for it, if the data was extracted from the detail file there will still be a remittance advice available for printing as well as the extract listing. The system requires you to enter the first cheque number to be used by the system. The cheques will be generated sequentially from this number. If you require the system can print the cheques for you or you can write them manually.
The system is capable of using a combined remittance advice / cheque document. In this case you should set the number of items that can be printed on one remittance advice in the system control details so that the extract program will skip a cheque number after the relevant number of items have been extracted for a vendor. This allows for page overflow when actually printing. Remittance advices may be printed multiple times or selected ranges (by vendor) may be printed but if using a remittance/cheque document you must re-sequence the cheques first.The remittance advices are usually retained until the next extract process. If cheques are being printed and the paper jams or any other type of problem occurs necessitating reprinting you may re-sequence the range of cheques in the spoiled range.
If payment of an account is shown to be by direct credit then the system will not create a cheque but will post the payments to a direct credits file where the Cashbook module will retrieve them and create a file that can be sent to the automated banking system.
Postings to the general ledger are made at the time that the posting entries are made to the creditors ledger. They are posted to the interface file and are generated into postable batches at the next available opportunity.
The usual array of listings of Aged Trial Balances and Postings are available.