Paying a Credit Card Statement before Receipts have been Received

Overview

This process is intended to be used when a Credit Card/Purchasing Card statement needs to be paid before the Business Office has received receipts from cardholders, and the final Expense Account is not yet known. This process does require that the Business Office know how many charges have been made, so the appropriate number of AP Invoice Items can be created. 

Please see the Purchasing Card Process for specifics on the difference between Single and Source Vendors.

Step 1: Create the AP Invoice and AP Invoice Items.

The AP Invoice can either be manually entered into the system, or imported using the AP Invoice Importer, whichever method is preferred. Each AP Invoice Item should be considered a transaction on the Credit Card/Purchasing Card Statement. The sum of all the AP Invoice Items should equal the amount that will be paid to Credit Card/Purchasing Card company to cover the statement balance.

Manually Entering the AP Invoice:

This method is recommended for Credit Card/Purchasing Card Statements that have a smaller number of transactions (less than 30). Use the Add an AP Invoice button on the Accounts Payable Homepage to add a new AP Invoice. When filling out the required fields, here are some helpful tips:

1. If you will always be using a Credit Card Clearing Account as the placeholder for the actual Expense GL Accounts for the Credit Card Vendor, configure the Credit Card Clearing GL Account as the default expense account for the Credit Card/Purchasing Card Vendor so it populates on all the AP Invoice Items added automatically. This is an optional configuration, and is not required for this workflow.
2. To add source vendors to the AP Invoice Items, click on the Open Query button above the AP Invoice Item Grid to open all the AP Invoice Items into a query. From here, you can pull in the source vendor field, and update them all from the query results rather than clicking into each AP Invoice Item.
3. The Invoice Number and Description fields are both alphanumeric and can be used to facilitate the desired level of detail for the Invoice. 

Using the Importer:

This method is recommended for Credit Card/Purchasing Card Statements that have a large number of transactions (30+). Fill out the AP Invoice Import Template, with the Vendor ID being the Credit Card Company, and the Source Vendor ID’s being the vendors that the goods were purchased from. For all the AP Items on the Invoice, set the DR GL Account to the Credit Card Expense Clearing Account on the import template before uploading. When ready, use the AP Invoice Import Processing tool to import the AP Invoice. For the specific step-by-step instructions for using the importer, please see the AP Invoice/Item Importing documentation article.

Step 2: Complete the AP Workflow

Once the Credit Card Invoice has been uploaded/entered into Veracross, proceed with processing and paying the Invoice using the AP Invoice Cycle and AP Payment Cycle.

Journal Entry from Posting the AP Invoice/Items:

Journal Entry from Posting the Payment for the AP Invoice:

Step 3: Transferring the Amounts to the Correct Expense GL Account

Once all the credit card holders submit their receipts to the business office, and the correct expense accounts are ready to be debited, complete the following steps which use the adjustment type of “Transfer: Different GL” to move those amounts on the AP Invoice and in the GL:

1. Open the AP Invoice that was used to record the payment of the credit card statement. Navigate to the Adjust tab of the AP Invoice Header. 
2. Click on the Open Query button next to the search bar above the list of AP Invoice Items. 
3. Input the correct Expense GL Account for each AP Invoice Item in the To DR GL Account field. Do not click update yet.
4. Once all the AP Invoice Items have the To DR GL Account field populated, click on the Action Menu⚡️and select Batch Update. 
5. Select the fields Temp Adj. Reason and Temp Adj. Date as the two fields that should be batch updated. Select the Temp Adj. Reason of Transfer: Different GL and a Temp Adj. Date (the date you are making this adjustment). Once Complete, click the green Update button.
6. After the batch update has been successfully run, navigate back to the adjust tab of the AP Invoice Header and refresh your screen. The system should have generated two new AP Invoice Items for each original AP Invoice Item, one to reverse the amount originally posted to the Credit Card Clearing Account, and one to record the amount on the updated Expense GL Account. The SUM at the bottom of the adjust tab that totals all the AP Invoice Item amounts should still equal the original amount posted and paid.
7. Click on the Action Menu⚡️and select Post Invoice. The system will automatically use today’s date as the posting date. If a different posting date is needed, enter the desired date in the Temp Posting Date field and click update before running the Post Invoice action.
8. Once the Post Invoice action has run successfully, click update on the AP Invoice Header to see the JE Ref. #, Posting Date, and Posted? Flag populate. Clicking on the JE Ref. # on any of the new AP Invoice Items that were generated will take you to the Journal Entry that was generated from posting the adjusted AP Invoice Items.

Journal Entry from moving the Expenses out of the Credit Card Clearing Account:

1. The Credit Card Clearing Account should be credited for the full amount that was held for the statement period.
2. Accounts Payable will be Debited and Credited as an "In-and-Out" from the reversal process, but will net to 0, which leaves no effect on the GL.
3. If applicable, the Interfund Transactions will be generated as well.
4. The Expense Accounts will be debited for the applicable amounts.