Suggest Vendor Payments

By using Suggest Vendor Payments action you can process open vendor ledger entries and create payment suggestions based on criteria such as vendors, due dates and so on.

In the following example, we are using Bookkeeper user profile.

Suggest Payments Using Vendor Priority and Available Amounts

Open the Payment Journal.

Here we are using the SEPA protocol, so we will create a new payment journal for Euro Payments which we will link to the World Wide Bank Bureau.

Note: We can pay vendors in different ways such as wire transfers, cash and cheques. You can also pay them electronically.

Select the payment journal (Euro) and click Edit Journal to start working with the journal.

Here in the payment journal you can start entering the line manually, apply the specific vendor entries to an open invoice and then post it (as explained in Handling Incoming and Outgoing Payments).

However, in general, using the Suggest Vendor Payments batch job will be a lot more efficient.

Scenario 1 – General

First time we will run it in very general terms.

Let us specify the following fields:

  • Last Payment Date
  • Skip Exported Payments (default)
  • Posting Date (is the work date)
  • Starting Document No. (default)
  • Bal. Account Type (choose Bank Account)
  • Bal. Account Type (specify the bank account, which is the worldwide bank account euro in this example)

You can filter here on vendor information, such as Payment Method Code, Currency, etc. But we will leave it unfiltered in this example.

Click Ok to run the batch. You will get a message for the currency code, but that is ok.

You can see the result, which shows a list of invoices that you need to pay to your vendors, within the last payment date.

This is one way of running the batch, however you will notice that a lot of invoices are for same vendor. So it would be interesting to summarize the payment line.

Scenario 2 – Summarize Payment Line

Delete the current lines on the Payment Journal and run the Suggest Vendor Payments batch again.

This time enable Summarize per Vendor field.

Click Ok to run the batch.

You can see the result where you are now left with one line per vendor.

You can select a vendor and click Apply Entries to see the multiple entries that have been summarized for the vendor.

This is another way of running the batch. However, besides summarizing, you can also use priorities, i.e. apart from applying the last payment date criteria you can add the criteria of vendor priority especially when you have limited amount to pay to the vendors.

Scenario 2 – Vendor Priority & Available Amount Criteria

If you go to a vendor card, on the Payments fast tab you can specify the priority (1,2, 3 and so on). The higher the number, higher the priority.

Go back to the Payment Journal and delete current lines.

First run the Suggest Vendor Payments batch again without a priority.

Click Ok.

Click on Test Report and Preview.

You will notice that the system suggests to pay $139,291.94/- (as in this example).

Suppose you only have $10,000/- at this moment to pay to your vendor, but the amount suggest by the system is too much. In this case you can start using available amounts in combination with priorities.

Go back to the Payment Journal. Delete the current lines and run the Suggest Vendor Payments batch again.

In this case, we do not select Summarize per Vendor.

Let us specify the following fields:

  • Use Vendor Priority
  • Available Amount (LCY)

Click Ok to run the batch. You will see number of invoices.

Click on Test Report and Preview, you will notice that we are only paying $7,755.25, which is lot less than the available amount.

The reason is that the system will only pay full invoices and not do partial payments. So these are the only full payments that the system can do within the available amount of $10,000/- amount.

Calculate Posting Date from Applies-to-Doc. Due Date

In general, you will like to pay the vendor based on due date rather than posting date.

Let us run the Suggest Vendor Payments function normally with the following settings:

Now we get the following suggestion by the system (similar to previous examples):

You will notice that in many cases we are paying invoices too early (for example we are paying in January, however in some cases the due date is at the end of February). This will have a negative impact on your cash flow. So, it would be interesting to pay vendors on due date of their invoices.

Delete the lines from the Payment Journal and run the Suggest Vendor Payments batch again, and this time select Calculate Posting Date from Applies-to-Doc. Due Date field.

Now you will see more or less same example but in this case you will notice that the posting date differs for each line and the posting date is now equal to the due date, which means that the invoice will only be paid on the due date, instead of your work date.

In this way you will be able to keep your money in your bank account as long as possible, which will have a positive impact on your cash flow.

If you want, you can combine it with offset dates.

Delete the lines from the Payment Journal and run the Suggest Vendor Payments batch again, and this time specify the Applies-to-Doc. Due Offset field. You can specify a negative or positive date formula. In the following example we will add 2 days (2D).

You will note that the system will add 2 days to the posting dates:

Edit Payment Proposal & Renumber

Delete the lines from the Payment Journal and run the Suggest Vendor Payments batch again (without offset dates):

Once the suggestions are generated, you have to see if you want to pay all the vendors. It is perfectly possible that you would like to delete some lines. In the following example we will delete few lines:

After you delete some lines, you will notice that you are skipping some document numbers.

Now, that is something which NAV does not like, because we need to have a sequence in our document numbers.

To deal with this issue, we can select all the lines and use the Renumber Document Numbers action.

NOTE: In this example we have also deleted the lines which do not have bank account numbers and have run the Renumbering again.

Export Payments to File

So now you have vendors with bank account that you can pay. You can pay the vendors electronically by creating a payment file. Click on Export Payments to File action.

An XML file is generated (based on SEPA in this example).

You can send the file to the bank and they will carry out payments to vendors.

In real life, if you are sending the file today, and tomorrow you have a second run, then it becomes important that you are able to skip payments (as long as you have not posted the journal).

Delete the current lines on the Payment Journal and run the Suggest Vendor Payments batch again by selecting Skip Exported Payments field.

By doing this the system knows which payments have already been exported, so as a result the system suggests line that have not been exported yet.

Credit Transfer Registers

Once that everything has been exported, you can navigate to the Credit Transfer Registers.

On the Credit Transfer Registers window, select the register and:

  • Click Entries, where you can see what you have exported to the payment file.

  • Click Reexport Payments to File. This is an interesting action, where you can export the file again in case something went wrong with the file like you lost it or it got corrupt for example.

Handling Incoming and Outgoing Payments

By default, Cash Receipt Journals are used to post incoming payments from customers and Payment Journals are used to post outgoing payments to vendors.

Working with Cash Receipt Journals

  • Open the Cash Receipt Journals. Here you can see various journals created with balancing accounts.

  • Select one (BANK in this example) and Edit Journal. Here you can simply enter the payment, for example in this case you have received a bank statement on which you see that a customer has paid an invoice. Fill in the following details:
    • Posting Date
    • Document Type (which is Payment)
    • Document No.
    • Account Type (which is Customer)
    • Account No. (which is a Customer No.)

  • Click Apply Entries. The concept here is to link the payment entry to one of more open customer entries. When you click on the Apply Entries, the system will list down all the open entries for the customer. You can then make an application.

  • You can now make an application, for example, you can specify that the customer here paid the invoice number 00-11 and then click Set Applies-to ID action. Note that system will enter the Balance.

  • You can also change the Amount to Apply, which will be reflected in the Balance. So let us say in this case the customer paid an advance of 25,000. Click Ok.

  • You will see that the Amount is applied and now you can post the cash receipt journal.

What is the result?

The payment will create ledger entries. Open the Customer Ledger Entries (for which the cash receipt journal was posted) and note the following result:

  • Here you can see the payment of 25,000. The Remaining Amount depicts if the ledger entry is closed or not. In this case the remaining amount is 0.00, which means that it not open anymore. The Open field is also not selected and the entry is closed.
  • However, as you just saw that the customer has paid an advance to a specific invoice, which you can see here. So this was an invoice of 185,039.38 (Amount field) and based on the advanced payment of 25,000 (see point 1), there is a remaining amount of 160,039.38(Remaining Amount field). This of course means that the invoice is not closed completely. The Open field is still selected.

It is interesting to see how the system processes these entries. You can say that Ok, the previous remaining amount is REPLACED by the new one, but what you will see that the system will NEVER replace, it will just add entries. You can see the details in the Detailed Customer Ledger Entry. This is explained in the following picture:

  • A Customer can have multiple Customer Ledger Entries.
  • Each Customer Ledger Entry can have one or more Detailed Customer Ledger Entries. So you can see the detailed customer ledger entry as the history of the customer ledger entry.

Working with Payment Journals

  • If we have paid a vendor, we can open the payment journal and make the payment.
  • Fill in the details in the payment journal such as:
    • Posting Date
    • Document Type (which is Payment)
    • Document No.
    • Account Type (which is Vendor)
    • Account No. (which is Vendor No.)

  • Click Apply Entries. You can apply the payment to the invoices that you have paid, for example invoice 200 in this case, by using Set Applies-to ID action.

  • The system will calculate the balance. You can click OK. You will see that the amount is now added in the journal line.

  • You can go ahead and post the payment journal.

What is the result?

You can check the result in the Vendor Ledger Entries. Also you can use the Applied Entries action to see on what documents the payment was applied to.