Scheduled Payments for Payables allows you to restructure AP invoice payments. You can easily create a schedule of payments that spans multiple periods.
A typical scenario in which this might be used is if you have a large invoice owed to one of your vendors, and you’d like to make a series of payments on the invoice instead of paying the whole invoice at once.
If your vendor requires an additional payment over the original invoice amount to recognize interest on the wmount owed, you can set this up as well.
Generally you would negotiate the payment schedule with your vendor, and once the two of you agreed, you could set it up in the Scheduled Payments function in Dynamics GP.
This is the basic process:
Here’s the Payables Scheduled Payments Entry screen:
My thinking is that the “Payables Offset” account should be a balance sheet account. Because when you post the payments schedule it will reverse the accounts payable entry, and credit it to the Payables Offset Account. This will properly show the amount as a liability, and not affect the income statement.
If you want to affect the income statement for this original vendor invoice transaction, then you should use the Revenue and Expense Deferral module to make that change.
Once the payment schedule is set and posted, you will periodically go to the Post Payables Scheduled Payments screen to select one or more of the payments, and convert them to current payables invoices on your AP aging:
These are the journal entries that were created by the short demo in the video below:
Original Payables Invoice Entry:
This is the entry created when the payment schedule was posted. It backs out the original accounts payable entry and move the amount to the “Payables Offset” account:
This is the entry made when a payment from the schedule is selected and converted into a current payables aging item. It recognizes the interest expense at that time:
Here is a quick video that shows this in action: