Allocate payments

Use this to allocate existing payments to outstanding invoices.

You will only be able to allocate payments if there is no query flag for the transaction.

Note: Sage 200 uses the query flags U for unauthorised. But other query flags, indicated by other letters may have been set against the transactions. See Set or remove query flags below.

You can:

  • Create and allocate a supplier payment for an outstanding invoice.
  • Allocate the full or a part paid amount.
  • Write off allocation discrepancies as discount.

  • Cancel (reverse) the allocations, as long as you have not saved them.

    To unallocate or revise the allocation details once you have saved them, use amend allocations.

  • Place queries on individual transactions if they are in dispute.

To unallocate or revise the allocation details once you have saved them, use Amend Allocation.

Note: You cannot use Allocation on Balance forward accounts or for invoices marked as queried.

  • 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.

  • In Ireland, VAT is calculated on the full value of the invoice regardless of any settlement discount.

When allocating transactions with settlement discounts, you need to account for the net and VAT discount.

We recommend that you allocate the receipt value plus the net discount first. This leaves the VAT discount outstanding.

Note: If the settlement discount is still valid, the Disc due is highlighted yellow on the allocation screen.

There are several ways you can achieve this:

  1. When you enter the payment, you record the amount of settlement discount taken. This is added to the payment total and shown in the Discount column for the payment on the allocation screen. When you allocate the payment to the invoice, the VAT discount will be outstanding.

  2. If you don't enter the net discount on the payment:
    1. Allocate the full value of the payment.
    2. Double-click the Allocate column for the invoice. As long as the invoice is not part paid, this automatically reduces the allocate amount by the VAT discount, leaving the net discount as the Difference.
    3. When you save the allocation, you can choose the write off the difference as discount.

  3. Enter and allocate a payment from the allocation screen;
    1. Select the invoice to pay.
    2. Click Payment. As long as the invoice is not part paid, the payment amount (cheque value) is automatically reduced by the VAT and net discounts. The net discount amount is added to the receipt.
    3. Click Save. The payment and invoice are allocated leaving the VAT discount outstanding.

If you use the Auto Allocation option, the Allocate amount is automatically reduced by the VAT discount as long as:

  1. The settlement discount period is still valid. (The Disc Due date is highlighted.)
  2. The invoice has not been part paid.
  3. The Settled Immediately option has not been selected on the invoice.

If the settlement discount is no longer valid, the full invoice value is allocated.

If you are creating and allocating a new payment:

  • The supplier's account balance is updated (decreased) by the value of the payment or payments posted (including discount if appropriate).
  • The bank account (for the balance sheet) in the Nominal Ledger and in the Cash Book, is debited with the value of the payment.
  • The discount allowed account (for profit and loss) in the Nominal Ledger is debited with the value of the settlement discount, if included.
  • The purchase control account (for balance sheet) in the Nominal Ledger is credited with the value of the payment plus any discount.

If you are allocating foreign currency transactions and using foreign currency revaluation:

  • The exchange rates on the transactions are allocated together and compared.
  • If there is a difference, the exchange gain or loss is calculated and posted to the currency adjustments and creditor control account(s) in the Nominal Ledger.

If you are allocating existing transactions:

  • The Nominal Ledger is not affected.
  • The balance on the supplier account is not affected.

Once transactions are fully allocated, they can be removed when a period end is run (as long as they are older than the number of months you specified to Keep Transactions For in the Purchase Ledger settings Supplier Defaults tab).

To allocate a payment to the original transaction

Open: Purchase Ledger > Enter Transactions > Allocation.

  1. Select the supplier account you want to allocate payments for.

  2. Enter the Allocation Date. This defaults to today's date.

    The Allocation Date is used to age transactions on the retrospective aged creditors report.

  3. The displayed window is split into two sections. The top section of the window shows the Credits (payments) for the account and the bottom section of the window displays the Debits (invoices) for the account.

    Transactions are displayed in ascending order by transaction date. You can sort the entries by selecting a column and then change the view from ascending to descending order or vice versa.

    The following information is displayed for all transactions:

    Transaction Type, Transaction date, Reference, Second reference, (gross) Value, Outstanding (value), Discount (amount), Discount due (date), Allocated (amount), Query (flag), payment Status (Full for fully allocated and Part for part allocated).

  4. Follow the required procedure:

    Use this if you want Sage 200 to allocate your transactions automatically.

    1. Click Auto Allocate.
    2. The total credit entries (payments) are added together first. All the debit entries (invoices) are allocated in date order (oldest first), until the debit values match the credit values.

    3. For any fully outstanding invoices with settlement discounts that are still valid, the Allocate amount is reduced by the VAT discount.

      For example, for an invoice with a net value of £100 with a 5% settlement discount, the Allocate value will be £119.

    4. If the total of the credits (payments) is less than the total outstanding debits (invoices), the transactions are allocated until the debit value and the credit value match. Any amount remaining is part allocated.

    5. If the total of the credits (payments) is greater than the total outstanding debits (invoices), the credit entries are allocated first, until the credit value to allocate is equal to the total outstanding debit value. All outstanding invoices are then fully allocated.

    Use this if you want to select the required entries and confirm the amount to allocate.

    • Select a Credit (payment) item.

    • Click Allocate. The total amount of the payment appears in the Allocate column.

      If you want to part allocate the payment, enter the amount you want to allocate.

      Note: If you are only allocating one credit item (payment) the reference of that item is recorded as the second reference of the debit item (invoice) if the second reference of the invoice is blank.

    • Select a Debit (invoice) item.
    • If the Difference is not zero you can:
      • Change the allocation amounts for the credits or debits in the Allocate column.
      • Allocate more items.

      • Choose to write off the amount as discount.

        This posts to the nominal discount account and bank nominal account.

    Use this to choose an outstanding invoice that you want to pay and create and allocate the corresponding payment. The supplier and bank account you choose to record the payment must operate in the same currency.

    You cannot enter a payment for any transactions that are queried.

    1. Select the debit item (invoice) that you want to pay.

    2. Click Payment.

      The supplier transaction entry window appears.

    3. Select the Bank account to be used. This must be in the same currency as the supplier account record.
    4. Enter the payment value.
    5. Click Save to return to the Allocations window.

    Use this to cancel the allocations you have made before saving.

    1. To cancel your allocations, click Reverse.
    2. Choose whether to reverse:

      • Debit and Credit.

        This clears all the allocations made.

      • Debit only.

        This clears the allocations of the debits (invoices) only. The credits (payments) keep their allocated value.

      Note: Once saved, you must use Amend Allocations to amend the allocations made.

    Use this if you want to assign or remove a query flag on a transaction. Placing a query prevents further actions on a transaction until you remove the query. (This is different from applying an On Hold flag, which applies to the whole account).

    Note: You can use any letter for the query flag apart from the reserved character U for unauthorised transactions.

    1. Select the transaction you want to query.
    2. To set a query, enter the character you want to use as query flag in the Query column.
    3. To remove a query, clear the query flag column.

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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.

See also

Other tasks

Enter supplier payments

Amend Purchase Ledger allocations

Reference

Supplier defaults (PL settings)

Change supplier account status