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Like job costs, vendor invoices for overhead expenses are added into Accounts Payable as they are received in the mail  

Adding these expense invoices is a relatively easy process, since you’ll be entering information right from the invoice.

Overhead invoices are added without jobs and tasks, since they don’t affect clients. But you lose some accountability on your profitability reports. Unless an invoice has a job and task, it isn’t included on profit reports -- only your agency financials. To get the best picture of your overall profitability, you might benefit by opening and using overhead job tickets. However, it’s faster to add as an overhead invoice, if you don’t require that amount of detail.

An expense invoice can have one or many invoice line items. Each line item is a separate expense account and amount. Invoice line items account for overhead expenses, such as office supplies.

If you write purchase orders, vendor invoices can reconcile your commitments automatically as they’re added. When you enter the invoice’s PO number, details from the purchase order -- vendor, terms, and amount -- are copied to the invoice. This saves time, plus makes your job costing more accurate. Also, you’ll see at a glance if the vendor is billing you for more than you authorized on the purchase order.

	Learn how to add an AP overhead invoice in this Clients & Profits classroom video training session. Running time: 2:36

To add an overhead expense invoice

1 From the Accounts Payable window, choose Edit > Add New Invoice > Overhead Invoice.



2 Enter the invoice’s purchase order number, if applicable, and a line number.

If you don’t know the PO number, choose Lookup > Purchase Orders. The purchase order Lookup List lists all open POs. The list can be sorted by clicking on any column heading, making it easy to find the right PO. Double-clicking on the purchase order copies its number to this invoice. If you don’t write purchase orders, ignore the PO number -- simply tab past the PO and line fields to the vendor field. The line number is entered automatically as 1, meaning the first line item (this saves time, since many purchase order have only one line item). The line number is important, because it points to the exact line item on the purchase order. It’s the only way to reconcile POs with many line items.

If this invoice covers the entire PO, leave the PO number blank then click the distribute to many dGLs option. This option lets you enter every line item from the PO onto the invoice after this window is saved.

3 Enter the vendor number.

4 Enter the invoice number, invoice date, accounting period, and terms.

Enter the invoice number and invoice date directly from the vendor’s invoice. If the invoice doesn’t have an invoice number, enter a combination of the vendor number and the date (e.g., ABC012098). This date is important since it’s used to calculate the age of your unpaid payables on aging reports. The invoice can be posted into any unlocked accounting period. The current accounting period (from Accounting Preferences) is entered automatically, but can be changed by choosing a period from the pop-up menu.

5 Enter the invoice’s payment terms and pay date.

The payment terms are copied from the vendor account, but can be changed. If the vendor offers an early-payment discount, be sure to enter its percentage and days to pay; the A/P aging and cash flash reports will calculate the invoice’s discounted balance automatically. The pay date is day on which you’ll schedule this invoice to be paid.

If this invoice is being paid via online checking, select the "Pay invoice via online banking" checkbox. Later, you will need to record an online payment for this invoice.

6 Enter the invoice total and its credit (i.e., liability) G/L account.

The invoice total is amount you’re being charged by the vendor, including sales tax and shipping but not early-payment discounts.

7 Enter the invoice’s description and debit (i.e, expense) account.

The invoice’s description is optional, but useful for auditing. It appears on journal entries when the invoice is posted. The default overhead expense account is copied from your G/L preferences or vendor, but it can be changed. Any expense account can be used.

This invoice can be charged to many expense accounts, if needed, by clicking on the distribute to many dGLs option. If clicked, this option prompts you to enter any number of line items once the invoice is saved.

Each vendor can have a Cost dGL account that will be used when adding overhead invoices for that vendor. Just choose Vendors from the Setup menu and click on the Acct Info palette button.

8 Click Save.

Once the invoice is saved, it can be proofed, changed, or deleted at any time before it is posted. The invoice doesn’t update vendors or the General Ledger until it is posted. Posting creates debit and credit journal entries and increases the vendor’s balance. Unposted invoices don’t appear on cost, aging, or accounting reports.

Posting AP Invoices

Posting a vendor invoice updates job tickets, job tasks, the vendor account, and the General Ledger. 
When invoices are added, they are unposted. Unposted invoices can be easily changed, letting you edit cost amounts before the account balances are updated. Posting is a methodical process that updates vendors, jobs and tasks, and the General Ledger. The process is the same whether you’re posting one invoice or many invoices. For more information on posting AP invoices, click here.