61 Set Up Constants for A/P

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61.1 Setting Up Constants for A/P

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From Accounts Payable (G04), enter 29

From Accounts Payable Setup (G0441), choose Accounts Payable Constants

Constants provide a basic framework for how your Accounts Payable system works, based on your business needs.

Setting up accounts payable constants consists of:

  • Setting up batch control

  • Setting up management approval

  • Setting up the automatic offset method

  • Setting up invoice number editing

  • Setting up time intervals for A/P aging reports

  • Setting up Suspended Tax Processing

  • Setting up Exchange Rate Difference Processing

Information about constants is stored in the General Constants table (F0009).

61.1.1 Before You Begin

  • Ensure that only authorized personnel can access and change accounts payable constants

Figure 61-1 Accounts Payable Constants screen

Description of Figure 61-1 follows
Description of "Figure 61-1 Accounts Payable Constants screen"

To set up batch control

You might want to track the total number of vouchers and total amount for a batch of vouchers and then verify those totals after you complete entering a batch.

On Accounts Payable Constants

Complete the following field:

  • Batch Control Required

Field Explanation
Batch Control Required A code that generates automatic verification of the totals entered for each batch. Valid codes are:

Y – Batch control on. A batch header control form appears when you select voucher or payment entry. You enter the total number of documents and the total amount you expect the batch to contain. When you finish entering each batch, the system displays the difference, if any, between the totals you expected to enter and the totals you actually entered.

N – Batch control off.

To set up management approval

You can specify that management approves each batch of vouchers before they are posted. Management approval allows you to designate a default status for your batches. The default statuses are:

  • Pending, which requires them to be approved before posting

  • Approved

On Accounts Payable Constants

Complete the following field:

  • Manager Approval of Input

Field Explanation
Manager Approval of Input A code that controls approval of batches for posting. Valid codes are:

Y – Management approval is required. The system assigns a status code of Pending to each batch. You must manually change the status to Approved before the system will post the batch.

N – Management approval is not required. The system approves all batches for posting.

To set up the automatic offset method

You need to designate how the system makes offsetting entries to the A/P liability and discount accounts when you post vouchers to the general ledger.

On Accounts Payable Constants

Complete the following field:

  • Offset Method

Field Explanation
Offset Method A method for automatically offsetting an entry when it is posted to the general ledger. Valid codes are:

D – Create an offset entry for each detail record (gross amount, discount amount, and tax accruals are separate offset entries)

S – Create a summarized offset for each detail record (gross amount, discount amount and tax accruals are combined into one offset entry)

Y – Create one offset per document (multiple items)

B – Create an offset for each batch

The system creates offsets against actual amount and multi-currency ledger types only.

The system creates offsets against actual amount and multi-currency ledger types only.

Note:

If a batch contains multiple currencies it will post in detail (D), even if you have your offset method to post in batch (B).

61.1.1.1 Example: Journal Entry Created by Automatic Offset

The following report shows a journal entry that the system created as an automatic offset using the batch method. The system uses the batch number for the document number of the automatic offset, rather than the document number of the transaction as with the other Offset methods.

Figure 61-2 General Ledger Post - Voucher Entry screen

Description of Figure 61-2 follows
Description of "Figure 61-2 General Ledger Post - Voucher Entry screen"

To set up invoice number editing

When you enter a voucher, you can have the system notify you if an invoice number is a duplicate for a supplier.

On Accounts Payable Constants

Complete the following field:

  • Duplicate Invoice Number Edit

Field Explanation
Duplicate Invoice Number Edit A code that designates how an invoice number should be edited. The codes and handling are as follows:

H – Edit the invoice number for duplication. The system issues an error message requiring you to enter a unique invoice number.

Y – Edit the invoice number for duplication. The system issues a warning message, but does not require action.

N – Do not edit the invoice number for duplication.

To edit the number in batch, run the Suspected Duplicate Payments report (P04601).

To set up time intervals for A/P aging reports

The columns on your aging reports are calculated based on the number of days in each time interval that you set up.

On Accounts Payable Constants

Complete the following field:

  • Aging Days

Field Explanation
Aging Days A field that lets you determine the time intervals for calculating aging. You can specify the numerical intervals to be used as aging categories for the columns on A/P aging reports. You can override these intervals by setting the processing options of the individual aging reports.

To set up suspended tax processing

Use this constant to intiate suspended tax processing either at the Accounts Payable or company level, so that taxes are accrued at time of payment rather than at the time of voucher-post.

On Accounts Payable Constants

Complete the following field:

  • Suspended Tax Processing

Field Explanation
Suspended Tax Processing A code that specifies whether the Suspended Tax Processing is active for Accounts Payable. This code is used at a System level and, optionally, at a Company level.

Valid values at the System level are:

Blank Suspended Tax processing is not active.

'0' – Suspended Tax processing is not active.

'1' – Suspended Tax processing is active for all vouchers.

'2' – Suspended Tax processing is activated at a Company level.

Note: Refer to company constants as seen in Company Numbers and Names (P00105) for further indication of whether Suspended Tax processing is active for specific companies and associated vouchers.

Valid values at the Company level are:

Blank Suspended Tax processing is not active.

'0' – Suspended Tax processing is not active.

'1' – Suspended Tax processing is active for all vouchers.

'2' – Suspended Tax processing is activated at a Tax Area level.

Note: Refer to User Defined Code 00/XA for Tax Areas that require Suspended Tax processing.

To set up exchange rate difference processing

When foreign vouchers are paid and exchange rate differences cause a gain/loss to occur, it is required in some countries that the gain/loss amount be handled as a legitimate transaction. This would require a valid voucher to be entered and paid for the amount of the gain/loss. Set this constant for exchange rate processing either at the Accounts Payable level or only for specific companies.

On Accounts Payable Constants

Complete the following field:

  • Exchange Rate Difference Processing

Field Explanation
Exchange Rate Difference Processing A code that specifies whether the Exchange Rate Difference processing is active for Accounts Payable. This code is used at a System level and, optionally, at a Company level.

Valid values at the System level are:

Blank – Exchange Rate Difference processing is not active.

'0' – Exchange Rate Difference processing is not active.

'1' – Exchange Rate Difference processing is active for all vouchers.

'2' – Exchange Rate Difference processing is activated at a company level.

Note: Refer to company constants as seen in Company Numbers and Names (P00105) for further indication of whether Exchange Rate Difference processing is active for specific companies associated vouchers.

Valid values at the Company level are:

Blank – Exchange Rate Difference processing is not active.

'0' – Exchange Rate Difference processing is not active.

'1' – Exchange Rate Difference processing is active for all vouchers.