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  Clients & Profits X Online User Guide

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A vendor check pays off unpaid invoices from Accounts Payable.  

Oldest invoices are paid off first, using the auto-allocate option, but can be changed. So you can decide which invoices should be paid with a check -- and which ones shouldn’t.

Vendor payments credit the cash account and debit the A/P liability account. Discounts or other adjustments can be included with each payment, making it easy to track early-payment discounts offered by vendors. Adjustments and discounts debit your A/P account and credit your earned discounts account.

The Vendor Invoice Aging (printed from the Snapshots menu) is commonly used when preparing to write checks because is shows every unpaid invoice so it can be used as a checklist of the bills to pay.

To add a vendor check

1 Choose Accounting > Checkbook.

2 Click the add button (or choose Edit > Write Check > Vendor Payment).

The Write Vendor Check window opens, displaying a blank check. Your default cash account is copied from Preferences.

3 Enter a checking account’s G/L number.

The G/L account number determines from which bank account this check will be written. You can manage many bank accounts, writing checks and making deposits by entering a different G/L account number.

4 Enter the check number.

Checks are numbered automatically based on the cash account’s G/L number. You can change the number by typing in a new number over the old. Changing the check number doesn’t affect the next check’s number -- it will be the next check number in sequence.

For better accountability, the check number entered on the check should match the pre-printed number on the check stock.

To change the next sequential check number, you can change the check number in the cash account. Once you’ve saved this check, choose Chart of Accounts from the Setup menu. Find the account you wish to change, then double-click on it. The next check number for this account appears at the bottom of the Edit Account window. Changing it here will affect the next check to be added.

5 If the check is handwritten and shouldn’t be printed, click the Hand-written check option.

The handwritten check option keeps the check from being printed. It should be checked only for checks that shouldn’t be printed. It can be changed later, if needed.

6 Enter the check date and accounting period.

This is the date the check was added. It is entered as today’s date automatically, but can be changed. The date appears on the printed check. It does not affect posting or the General Ledger (unlike the period). Cash reports can be printed by check date, showing all of the checks that were written for a range of dates. The accounting period determines how this check will affect your financial statements. The current period is copied from Agency Information, but can be changed. A check can be posted into any unlocked accounting period.

7 Enter the vendor number and payee name.

The vendor number associates this check with a vendor account. A check can only be written to one vendor. Tabbing past the vendor number copies the address and account balance to the check. The check’s address (which appears on the printed check) can be changed without affecting the vendor account. The vendor’s account balance is copied into the check amount; Clients & Profits makes an assumption that you’re paying off the vendor’s balance in full, as a shortcut. The vendor name is copied into the paid to (i.e., payee) name, but can be changed. The paid to name appears on the printed check, so it can be edited to include an account number, mail stop, or some other kind of information.

8 Enter the check amount.

This is the amount you wish to pay to the vendor, less any discounts or adjustments. This amount will be distributed to unpaid invoices. Tabbing past the check amount displays the written amount, which can’t be edited. You can write a check for more than the vendor’s balance; if so, one of the vendor’s invoices will be overpaid. When the check is posted, the vendor will have a credit balance. Later, this credit balance can be applied to upcoming invoices.

The auto-allocate option will automatically pay off the vendor’s oldest invoices first. Using this option saves time when paying off many invoices for vendors like Federal Express, who send many invoices during the month. Even with the auto-allocate option, you can still change which invoices are paid with this check.

9 Enter the check memo.

The memo describes the check’s purpose (e.g., payment on account, credit, etc.) on cash reports and G/L reports. A default memo can be set up on the vendor file. The memo is user-defined, and can be changed later. If you are planning to take an early-payment discount, enter the check amount as the payment less the discounts.

10 Enter the vendor’s payment address.

The vendor’s address is copied from the vendor account, but can be changed. This address appears on the printed check. You may need to change the address to send it to a different location, such as a corporate office or accounting department. It only appears on this check. Changing the check’s address doesn’t affect the vendor’s address.

A separate address for payments can be set up on the vendor file that will copy to checks. Use this address, if checks are always sent to a different location than the vendor’s main address.

11 Check or Uncheck the "Include on year-end 1099 report" checkbox

This checkbox controls if this check will be included in the total amount printed on the 1099 for this vendor.  It will be checked by default if this vendor is set to include checks on the 1099 (Setup > Vendors, then select this option setting in the Account Info window).  However, not all checks for a vendor must be included on the 1099, so C&P provides the flexibility to include or exclude certain checks on the 1099 total via this checkbox.

12 Click Save.

The check’s header is saved, but it’s not complete -- the check needs to be distributed. Distributing a check applies its payment amount to unpaid payables. You must distribute a check to unpaid invoices completely; if the line items don’t balance to the check amount, the check can’t be saved.

Checks have limits. The standard check can contain only 17 line items (i.e., paid invoices or job costs). If you’re paying off more than 17 invoices, additional checks will be created automatically.

Distributing vendor payments

Writing a check for vendor payments is a two-step process: (1) add the check, then (2) apply it to unpaid invoices. The Apply Vendor Payment window opens automatically when the check is saved.

If you checked the Auto-allocate option when the check was added, the check amount will be applied automatically to the vendor’s oldest invoices. This is a fast, easy way to pay your payables. It’s flexible, though, so you can still adjust which invoices will be paid -- and which ones won’t.

You can’t save this check until its amount is completely applied to invoices. Clicking Cancel will delete any payments you’ve entered, leaving the check unallocated and prompting you to delete the check or re-allocate the amounts. It must be allocated before it can be saved.

The standard check can contain only 17 line items (i.e., paid invoices or job costs). If you’re paying off more than 17 invoices, additional checks will be created automatically.

To apply a check amount to unpaid payables

When a vendor check is saved, the Apply Vendor Payment window will open, listing the vendor’s unpaid invoices.

1 Click on an invoice to select it for payment.

2 Enter a discount amount and cGL, if needed, then enter the invoice’s payment amount.

If your vendor offers discounts for early payments, you can enter them when applying the check amount. Discounts decrease the invoice’s balance due, just like a payment amount. The debit to A/P in the General Ledger will be the amount of your discount plus the amount of the check. You can enter discounts on any invoice, without limitations. The credit goes to the early-payment discount account.

3 Enter a debit account for this payment.

The dGL is the invoice’s Accounts Payable (i.e., its cGL), and is copied from the invoice itself -- not your G/L preferences.

4 Press Tab to save this payment amount.

Pressing Tab saves this payment amount temporarily to the invoice, then selects the next unpaid invoice.

5 Repeat these steps until the check amount is completely applied, then click Save.

Recording a check before the due date. Accounts Payable invoices can be paid anytime after being posted, regardless of the due date. Simply post the A/P invoice, then write the vendor check.

How Clients & Profits handles electronic payments

The online payments feature in Clients & Profits X lets you track payments made electronically though your bank, instead of writing checks to vendors. Clients & Profits X does not make electronic payments directly. Instead, you’ll make the electronic payments from your bank’s online banking or bill-pay service then record the payments in Clients & Profits X.

They're added into Clients & Profits X through the checkbook, just like a conventional printed check. Like a check, online payments are made separately for each vendor and applied to any of the vendor’s outstanding payables. You can record online payments into C&P X as soon as you make them, or record them later from your bank statement. Learn more about recording online payments here.

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