Shared Transactions - 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.
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:
Bills that are already partially paid or credited
Shared Payments calculates the balance to move when the Shared Payment Subsidiary field is populated on the Bill. If the bill has already been partially settled by a Bill Payment or Bill Credit, Shared Payments moves only the remaining unpaid balance to the Shared Payment Subsidiary, and the Advanced Intercompany Journal Entry is scaled to that remaining amount rather than the full bill total. If the bill is already paid in full, no journal entry is generated.
For this reason, apply any Bill Payment or Bill Credit first, then populate the Shared Payment Subsidiary and Shared Payments Bank Account fields.
Paying the Vendor
After the vendor bill is created and Shared Payments records the journal entry, the vendor can be paid. There are two ways to initiate this payment: Applying a payment to the Shared Payments Journal Entry (recommended) and applying a payment to the Originating Bill.
To pay many journals in one run, see Shared Transactions - Shared Payments - Applying payments in batch.
Applying a payment to the Journal Entry (recommended)
- 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 Payments automatically 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:
Applying a payment to the Source Bill
This method should be used when a third-party system is pushing bill payments into NetSuite, and that third-party does not have the ability to apply payments to Journal Entries.
For this method to work, the Shared Payments Subsidiary and Shared Payments Bank Account fields must be populated and the Initiate Shared Payments from Source system setting must be enabled, or the Create Shared Payments Journal at Payment (AP) setting must be on, which applies the same behavior automatically. See Netgain System Setup. The Shared Payments Bank Account is the Bank Account in the Paying Subsidiary from which the payment came.
Applying a payment to the Source Bill, rather than to the Shared Payments Journal Entry, is nearly identical to the process outlined above. The difference is that instead of selecting the vendor and then the Shared Payments Subsidiary, the user will remain on the Source Bill's subsidiary and submit the payment. When this happens, Shared Payments will intercept the Bill Payment that NetSuite creates and replace the Source Subsidiary and Bank Account with the Shared Payments Subsidiary and Shared Payments Bank Account.
Paying through the NetSuite EFT module
Shared Payments also works with NetSuite's EFT module. It works the same way as a standard bill payment - you start from the EFT payment screen instead of Pay Single Vendor, and the payment is still applied to the Shared Payments Advanced Intercompany Journal Entry (AICJE). One difference: on the EFT screen you filter by bank account rather than by vendor and subsidiary.
Please note that when you use the Initiate Shared Payments from Source or Create Shared Payments Journal at Payment (AP) settings, whether a bill can be paid this way through EFT depends on whether the bill's subsidiary has a bank account associated with it:
- If it does, select the bill on the EFT screen and Shared Payments overrides it to create the AICJE.
- If it does not, the bill never appears on the EFT screen. Create the AICJE first by populating the Shared Payment Subsidiary on the bill, then pay the AICJE.
Creating the journal when the bill is paid
By default, Shared Payments creates the journal when you save the bill and dates it to the bill. To keep the payable in the bill's subsidiary until the bill is paid, turn on Create Shared Payments Journal at Payment (AP) under Shared Payments Preferences on Netgain > Setup > System Setup. For the setting, see Shared Transactions System Setup.
The AP setting applies to vendor bills only. Invoices have their own setting, Create Shared Payments Journal at Payment (AR), and keep getting their journal when the invoice is saved while only the AP setting is on. For the invoice side, see Shared Transactions - Shared Payments - Accepting Customer Payments on Behalf of Another Subsidiary.
Step-by-step process
- Open the vendor bill, enter a value in the Shared Payment Subsidiary field and click Save. No journal is created yet.
- Pay the bill from the bill's own subsidiary, as described in Applying a payment to the Source Bill. You do not need to turn on Initiate Shared Payments from Source as well, because that behavior is applied automatically while the AP setting is on.
- When the bill payment saves, Shared Payments creates the journal and dates it to the payment. It then moves the payment to the Shared Payment Subsidiary and its bank account, applies the payment to the journal, and marks the bill as paid.
The journal covers the full remaining amount of the bill, even when the first payment is a partial one. Set the Shared Payments Bank Account field on the bill if the paying subsidiary has more than one bank account and you want a specific one. Left blank, NetSuite uses the paying subsidiary's default bank account.
The Apply Payments screen lists bills that have no journal yet and creates their journals as the first step of the run. See Shared Transactions - Shared Payments - Applying payments in batch.
An approved payment cannot be moved
If the bill payment is already approved when it saves, NetSuite does not allow its account to change, so Shared Payments cannot move it to the Shared Payment Subsidiary. Shared Payments records a message on the bill that explains what was left behind.
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. The Bill Payment will only be voided if it applies to a single bill. Shared Payments cannot void a Bill Payment that is applied to more than one Shared Payments Advanced Intercompany Journal Entries. Shared Payments cannot process a partial refund.
Deleting or Voiding Payments with Shared Payments
When a vendor payment linked to a Shared Payments Journal Entry is deleted or voided, Shared Payments will automatically refresh the associated Automated Intercompany Journal Entry (AICJE) and reopen the original vendor bill, restoring its status to Open. For voiding payments, Shared Payments supports only the Voiding Journals method, in which NetSuite creates a separate voiding journal entry when a payment is voided.
If your account uses the alternative void method (voiding the transaction directly without creating a journal), the automatic bill reopening will not trigger. In that case, you can either switch to the Voiding Journals setting under Setup > Accounting > Accounting Preferences, or manually edit and save the AICJE after voiding to trigger the recalculation.
