Pay a vendor with a credit card or line of credit

• Remit-to payment vendors cannot be used with this workflow. All expense and purchase vendors must remit to themselves.
• Expenses and purchases must be entered to their actual vendors. Entry of an item directly to the CC/LOC vendor is not permitted. DDI recommends creating a credit card vendor for the entry of miscellaneous expenses such as gas, meals, and sundries, for which a full-fledged vendor is not necessary.
• Multi-branch companies must create a bank account for each branch if the balance sheet is split by branch. This is likely if a different operating account is used by each branch.
• If multiple currencies are used, they must be set on both banks (CC/LOC account and Operating account) plus all involved Vendors.

• Create a General Ledger Account for the CC/LOC
• Create a vendor specifically for the CC/LOC, using the G/L as the expense and liability.
• Establish the new G/L account as a reconcilable bank.
• Optionally, consider creating a vendor category for any vendor paid by CC.

• Enter a vendor payable that was paid by credit card, or a purchase funded by a credit line.

• Generate a hand check to show the vendor as paid and transfer the liability to the CC/LOC.

• Produce a voucher to the CC/LOC to represent a balance payoff from an actual bank account.

• Reconcile the CC/LOC as a negative balance bank account.

Create a current liability G/L account to represent the balance owed to the CC or LOC. This account will carry a credit balance to indicate that funds are owed to the credit card or credit line.

1. Go to Accounting > General Ledger > G/L Account.
2. Click New.
3. For the G/L Account Number, choose a number that aligns with other current liabilities such as Sales Tax Payable.
4. Add the appropriate group to the account before saving.

   

   The account is now ready to set up as a reconcilable bank.

A unique vendor is required for the credit card/line of credit. This vendor represents an internal clearing house and should not be used for any other purposes.

1. Go to File > Vendor > Master.
2. On the navigation toolbar, make sure the Setup tab is selected, and then click the Main tab along the bottom.

   

3. Click New.
4. In the Vendor box, type a name for the vendor such as “CC/LOC.”
5. Click the General tab.
   1. Set the Category to a credit card or bank account. Vendor Categories are a useful way of filtering.
   2. From Terms, choose Due on Receipt.
   3. If more than one Currency Code is used, set the appropriate code; otherwise leave it blank.
   4. Enter the same G/L Account as used for the bank in the Expense G/L and Liability G/L fields.

      

6. Click Save.

1. Go to File > Company > Bank.
2. Type the G/L number for the CC/LOC bank, and then press the Tab key. You will see a message: "Bank Not On File. Do you wish to create a new bank?" Click Yes.
3. Complete the following information:
   • Branch: This field is reserved for multi branch companies using a distinct account for each branch. Single branch companies may enter a branch or leave it blank.
   • Currency Code: Enter the currency code only if more than one currency is active.
   • Bank Name: Enter the name of the G/L account.
   • ABA #, Account Number, Last Check #: These fields are required; however, since the account will not be used for producing negotiable checks, you can enter "dummy" numbers for each.
   • # of Signatures: Select the system default of 1.
   • Print U.S. Funds on Check: For Canadian customers with U.S. dollar specific accounts.
   • Bank Book Balance: Use $0 and a date immediately before the first posting to the G/L account. Entering a non-zero value or incorrect date could cause reconciliation difficulties in the future.
   • Reconciled Balance: Use $0 and a date immediately before the first posting to the account. This field updates each time a unique bank reconciliation is permanently saved.
4. Complete the Credit Line fields as follows:
   • Credit Line Bank: this field must be checked to activate the use of the CC/LOC bank.
   • Credit Line Vendor: enter the name of the vendor. The name will display in the field. Hover over it to see the vendor number.

     

5. Click Save and the new workflow is ready to use.

1. Go to Accounting > Accounts Payable > Invoice Entry.
2. Select the Vendor. Expenses and purchases must originate on their vendors.
3. Assign an Invoice Number. This establishes a new A/P record and cannot be changed later.
4. Choose an Invoice Date.
5. The Branch defaults to the main branch used by the organization. Change as necessary.
6. If there is merchandise on the invoice, link the PO.
7. The Liability G/L will remain Accounts Payable.
8. Terms will default to those set for the vendor.
9. Enter the Gross Amount, Freight Amount, Tax Amount (Canadian users only), and Discount Amount.
10. The Discount Date and Due Dates are controlled by the vendor terms.
11. The AP period default to the system current processing period. Change if needed.
12. Proceed to the G/L Distribution. If this invoice is for merchandise, the inventory G/L will default. Otherwise distribute to the appropriate account(s) and branch(es).

    

13. To save and pay right away, click Pay Invoice.

    To pay later, click Save.

    

1. Go to Accounting > Accounts Payable > Check Print.
2. Click Edit.
3. Change the G/L Bank Account to the Credit Card/LOC. This step is required to transfer the liability.

   

4. Choose the vendors and/or the individual invoices to be paid.
5. Alternatively, click Individual to print a voucher for a single vendor. If printing a voucher, check the printer for paper type.
   • The CC/LOC G/L account will show a credit balance.
   • The original invoices will now show as paid on the original Vendor Ledger.
   • The invoice created to transfer the liability is notated “Credit Line Invoice. No editing permitted.”

     

     

1. Go to Accounting > Accounts Payable > Check Print.

   The screen will default to the main branch and bank with all current vendor open balances (debit and credit) displayed.

2. To initiate a new batch, click Edit.
3. Select the mode:
   • To print more than one check based on predetermined criteria, choose Batch .
   • To print a single system check, choose Individual .
   • To print a single voucher with a manual number, choose Hand Check.

     

4. Once all invoices are selected, click Print and make sure there is check stock in the printer.

   Do not acknowledge that the checks have printed correctly until you verify them.

   This will close out the balance on the CC/LOC. On the CC/LOC Vendor Master, the payment shows that it was paid from the operating account or whatever account was used to pay the account down.

1. Go to Accounting > Bank Reconciliation > Bank Reconciliation.

   The default bank account will populate.

2. In the Bank box, type the G/L account for the CC/LOC, and then press the Tab key.
3. In the From Date calendar, choose the statement cutoff date. It may not be the last day of the month.
4. Enter the balance as a negative amount if payment is due on the statement.
5. Click Search.

   

   Open credit card items will show as negative amounts.

   Payments made to the card display as positive amounts.

When voiding a transaction charged to a CC or LOC, the check to the CC/LOC must be voided first. This creates a void check and void invoice in the same step.

When using a credit card to pay for miscellaneous charges, such as travel, gas, food, etc, that are not linked to an AP Invoice, you must use a unique credit card vendor, since it is not possible to enter any manual AP invoices to the CC/LOC vendor.

You can either enter these miscellaneous charges as they happen to keep them separated for reconciling purposes, or you can wait until the end of the month and enter one AP invoice to distribute among the G/L expenses. Once those expenses are entered, the invoice(s), would be paid for this vendor similarly to those of the merchandise vendors that have been entered in during the month.

In previous versions of Inform, credit card payments to vendors may have been handles one of two ways. How you manage the transition to the new workflow depends on which method you used:

The credit card vendor was used as a “Remit To” when paying merchandise vendors for inventory.

If you used this method, then when you transition to this new CC/LOC workflow, there may be some unpaid invoices remaining. If so, pay these invoices using the new workflow as soon as possible. Inform ERP creates the CC Invoice on the CC/LOC vendor, which is linked to the new bank. The invoice is to be paid when the statement is received and later reconciled.

A CC Liability account was created as a bank from which vendor invoices were paid.

In this method, you pay the vendor from the check print screen using a CC bank, and then later make a journal entry to record the payment from the operating account to the CC. This process could result in a balance in the G/L. To manage this balance, you will make split payments

• There will be a payment in the check print screen for all invoices being paid
• And there will also be a journal entry to record the payment of the lingering balance from the prior method.

Continue this process until the old balance in the account is paid off, and just the invoices comprise the balance in the account.