Enter supplier payments
Note: You can enter payments in the Cash Book as well as the Purchase Ledger.
Use this to record payments you have made to your suppliers that have not been generated using Payment Processing in Sage 200. The payments are applied to supplier accounts in accordance with their account type.
- For Open item accounts, you must manually allocate the payments to outstanding invoices.
- For Balance forward accounts, the payments are allocated when the period is closed.
- For Automatic allocation accounts, the payments are automatically allocated when the period is closed. The oldest outstanding invoices are allocated first.
If you use Supplier Payments, you can use this to make payments directly to suppliers. The payment will be submitted for approval to your Supplier Payments account approver.
Note: You must generate and allocate payments automatically if you want to print cheques or remittance advices for your suppliers.
When you enter a foreign currency payment, you must also:
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Enter an exchange rate.
Note: Exchange rate variations are handled in the Foreign Account Revaluation routine.
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Enter an exchange loss or gain on the transaction, only if you are not using Foreign Account Revaluation.
The loss or gain on the transaction is entered in the Bank Charges area of the window, selecting the Currency Adjustments nominal account.
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Enter bank charges, if applicable. (Bank charges are in the same currency as the bank account.)
If your bank account is in the same currency as the payment you intend to make, e.g. trading with a supplier in the USA and you also have a US Dollar bank account, you can use process the payments, using the Generate Payments option.
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In the UK, VAT on an invoice is only discounted when it is paid within the settlement discount period.
On each invoice, VAT is calculated by default on the full invoice value. If the invoice is paid within the settlement discount period, a VAT adjustment is required, to account for the discounted VAT.
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In Ireland, VAT is calculated on the full value of the invoice regardless of any settlement discount.
If you qualify for the discount when you pay the invoice, you'll pay the invoice total less the net and VAT discounts.
We recommend that you include the net discount amount on the payment, but not the VAT discount. This makes sure that the net discount is posted to the Discounts Taken nominal account.
You must account for the VAT discount separately with a credit note. This makes sure that the VAT is adjusted on your VAT return.
For example, for an invoice of £100 with a 5% discount, you will pay £114. (Net disc = 5 and VAT disc =1). You enter a payment value of 114 and the discount as 5. This posts a payment with a total value of 119. Once allocated, the VAT discount is still outstanding and can be dealt with by a credit note.
- The supplier's account balance is updated (decreased) by the value (including any discount taken) of the payment or payments posted.
- The bank account (for the balance sheet in the Nominal Ledger and in the Cash Book, if used) is credited with the value of the payment.
- The bank account (for profit and loss) is updated with the value of any bank charges, if applicable.
- The settlement discount taken account (for profit and loss) in the Nominal Ledger is credited with the value of the settlement discount, if included.
- The purchase control account (for the balance sheet) in the Nominal Ledger is debited with the value of the payment plus any settlement discount.
- Any currency adjustments are posted, if applicable.
- Transactions are allocated if allocation has been selected.
- If this supplier is set up to be paid using Supplier Payments, the payment will be submitted for approval to your Supplier Payments account approver.
To enter the payment
Open: Purchase Ledger > Enter Transactions > Payment.
Open: Cash Book > Payments and Receipts > Sales and Purchase > Purchase Payment.
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Select the Bank Account.
Note: If you haven't created any bank accounts in the Cash Book, you can select the Nominal account you want to use. If you use the Nominal account, you cannot enter foreign currency transactions.
If the cheque currency is different from the bank currency you must also enter the Exchange rate and Bank charges for the receipt. Bank charge details are in the same currency as the bank account.
- Click Clear.
- Select the supplier account.
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Enter the Transaction details.
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Enter the transaction date.
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Enter the transaction references if required.
Note: If the supplier is set up to be paid using Supplier Payments, the Reference will be used as the reference for the actual bank transfer. Only valid characters will be included: a-z, 0-9, - (dash), . (full stop), / (forward slash), and space. Any invalid characters will be ignored. This applies to Sage 200 Professional version 2023 R1 onwards.
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Enter the Payment details normally in the supplier's currency:
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Enter the Cheque value.
Note: Once you enter this value, the Exchange rate can be amended, if required.
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Enter any net Settlement discount taken.
This is added to the amount paid and posted to the Discounts Taken nominal account.
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If applicable, enter the Exchange details.
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Accept or amend the Exchange rate value by clicking on the (
) to the left of the box. This opens the Amend Exchange Rate window.Note: If you do not amend the exchange rate then the displayed exchange rate is used for the transaction.
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Enter the Bank charges, if applicable. Bank charges are in the same currency as the bank account. You also need to accept or amend the nominal analysis code displayed and apply a Narrative if required.
Note: If you want bank charges to be included in your VAT return, then don't enter your bank charges here. Instead, you should enter the bank charges as a separate Nominal Vatable Payment or Nominal Vatable Receipt, using the appropriate VAT rate.
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Save the payment:
- To save the payment without allocating, click Save.
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To save the payment and allocate to the outstanding transaction, click Save and Allocate. Enter the allocation details.
Note: When you allocate a payment/receipt, the allocation date will default to either today's date or your payment/receipt date. This depends on what you have chosen as the Default allocation date in
- If you entered a payment whilst you're reconciling your bank account, you can click Save & Create Rule to create a bank feeds rule for this transaction, to save you entering it again the next time.
Note: If the supplier is set up to be paid using Supplier Payments, the payment will be submitted for approval to your Supplier Payments account approver.
Sage is providing this article for organisations to use for general guidance. Sage works hard to ensure the information is correct at the time of publication and strives to keep all supplied information up-to-date and accurate, but makes no representations or warranties of any kind—express or implied—about the ongoing accuracy, reliability, suitability, or completeness of the information provided.
The information contained within this article is not intended to be a substitute for professional advice. Sage assumes no responsibility for any action taken on the basis of the article. Any reliance you place on the information contained within the article is at your own risk. In using the article, you agree that Sage is not liable for any loss or damage whatsoever, including without limitation, any direct, indirect, consequential or incidental loss or damage, arising out of, or in connection with, the use of this information.
Other tasks
Amend Purchase Ledger allocations
Reference
Automatically process supplier payments