Shared Payments - Paying Bills on Behalf of Another Subsidiary
Overview
Shared Payments enables companies to pay vendor bills for another subsidiary by automatically generating an intercompany journal entry and applying the payment to the original bill.
The following walkthrough explains this process.
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Generating Shared Payments Journal Entries
When a vendor bill is received by one subsidiary but paid by another, Shared Payments can automate the payment process from the designated subsidiary.
Step-by-Step Process
- Navigate to the Vendor Bill that requires a Shared Payment.
- Under the Custom subtab, enter a value in the Shared Payment Subsidiary field. This indicates that the bill will be paid from a different subsidiary:
- Click Save on the Vendor Bill record.
- After saving the bill with a Shared Payment Subsidiary, a new Shared Payments subtab appears on the record. This subtab provides a preview and link to the Advanced Intercompany Journal Entry that was created—which transfers the payable from the original subsidiary on the vendor bill to the specified Shared Payment Subsidiary:
This journal entry will be recorded on the books of the Shared Payment Subsidiary.
The Custom subtab of the Advanced Intercompany Journal Entry will contain a link back to the vendor bill that generated the journal entry through Shared Payments:
Paying the Vendor
After the vendor bill is created and Shared Payments records the journal entry, the vendor can be paid.
Step-by-Step Process
- Go to Transactions > Payables > Pay Single Vendor.
- Select the vendor to be paid in the Payee field.
- Enter the correct subsidiary in the Subsidiary field. This should match the Shared Payment Subsidiary selected earlier on the bill record.
- Apply the bill payment to the Shared Payment journal entry rather than the original vendor bill:
- Click Save to process the Bill Payment.
- At this stage, the Bill Payment is created in the Shared Payment Subsidiary and applied to the Shared Payment journal entry. Once applied, Shared Paymentsautomatically marks the original vendor bill as paid in the bill’s subsidiary using the Shared Payments journal entry. No additional manual action is required beyond applying the payment.
- Users can apply partial payments to the Advanced Intercompany Journal Entry and Bill Payments will be created for that partial amount until the original vendor bill is marked paid in full.
- On the Shared Payments Advanced Intercompany Journal Entry, the Related Records subtab will list the newly generated Bill Payment:
- On the original Vendor Bill, the status will now display as Paid in Full. Under the Related Records subtab, the Shared Payments journal entry will be listed as a payment for the bill:
Editing Bills with Shared Payments
With Shared Payments, a bill can be edited until a payment is applied. When a bill is modified, Shared Payments automatically deletes the previous journal entry and generates a new one with the updated information.
Bills should not be edited after payments are applied, as Shared Payments will not update journal entries for paid bills.
Step-by-Step Process
- Go to the Vendor Bill that requires an update, and click Edit.
- Make any necessary changes (e.g., updating the amount), then click Save to apply the updates.
- After the bill is edited and saved, the system will delete the original Shared Payments journal entry. The Shared Payments subtab will then display a new journal entry reflecting the updates:
Refunds with Shared Payments
Shared Payments can handle full refunds that are processed by creating a credit memo that is applied directly to the original bill that was created. When a credit memo is applied to the original bill, Shared Payments will reverse the Advanced Intercompany Journal Entry that it created and void the Bill Payment. Shared Payments cannot process a partial refund.