Record money paid to suppliers

Find this screen

Open: Suppliers > Enter Transactions > Purchase Payment.

How to

Enter a payment

Open: Suppliers > Enter Transactions > Purchase Payment.

  1. Select the Bank account.
  2. Click Clear or tab to the Code field.
  3. Choose the supplier from the Code, Short Name or Postcode drop-down list.

  4. Enter the details:

    • Date - This defaults to today's date.

    • Reference and Second reference 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.

    • Cheque value - Enter the payment amount.
    • Settlement discount - if applicable.

  5. To save the payment:

    • Click Save to save without allocating.

    • Click Save and allocate to allocate the payment.

      Note: When you allocate a payment/receipt, the allocation date will default to either today's date or the payment/receipt date. This depends on what you have chosen as the Default allocation date in Supplier Defaults and Settings.

    • 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.

Enter a foreign currency payment

When you choose a foreign currency supplier, additional cheque currency, exchange rate and bank charges boxes are displayed.

If there is an exchange rate gain or loss between the transactions, this is dealt with by Sage 200 automatically.

Enter the following additional details:

  1. Currency - The supplier's currency is entered by default. Select a different currency if required.

  2. Exchange rate - The current rate is displayed. Click to change this.

  3. Bank charges - Enter if applicable. Bank charges are entered in the same currency as the bank account.

    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.

  4. Save the payment:

    • To save without allocating, click Save.

    • To save and allocate it, click Save and Allocate.

      Note: When you allocate a payment/receipt, the allocation date will default to either today's date or the payment/receipt date. This depends on what you have chosen as the Default allocation date in Supplier Defaults and Settings.

Enter a foreign currency payment in a third currency

There may be an occasion where you pay a foreign currency supplier in another currency. For example, you pay your Canadian supplier in US dollars from your sterling bank account.

The key point here is that you decide the amount that is posted to your supplier's account. Say the payment is for US $75, this is roughly the same as CAD 100 depending on the exchange rate. When you enter the payment, you must decide whether you want the US $ payment to be equivalent to CAD 100. This is the amount that is posted to your supplier's account to be allocated.

To enter the payment:

  1. Choose the currency for the payment from the Cheque currency drop-down list.

  2. Enter the amount of the payment in the Cheque value box. This is in the currency of the payment, e.g. US dollars.
  3. If applicable, enter the settlement discount amount.
  4. Enter the amount that you want to post to the supplier'ss account in the Supplier cheque value box. This is in the supplier's currency, e.g. CAD.
  5. The Exchange rate is displayed. Click to change the exchange rate.

  6. Enter the Bank charges, if applicable. Bank charges are entered in the same currency as the bank account.

    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.

  7. The value of the payment is shown in the Net bank cheque value after charges box. This should be the same as the amount paid out of your bank account.

  8. To save the payment without allocating, click Save.

    To save the payment and allocate it to an invoice, click Save and Allocate.

Your supplier sends you an invoice for CAD 100. You pay the supplier in US $75 from your sterling bank account.

The current exchange rate is £1 = $1.4 so the payment is worth £53.57. You want to allocate the US $75 to the outstanding CAD 100 invoice.

To do this:

  1. Select US dollar as the cheque currency.
  2. Enter 75 in the Cheque value box.
  3. Enter 100 in the supplier cheque value box.
  4. Enter the Exchange rate as 1.4.
  5. The Net bank cheque value after charges shows as £53.57. This is the amount that is posted to the bank account.
  6. Click Save and Allocate. You can now allocate the payment to the outstanding invoice for CAD 100.

The following updates are made:

  • Nominal Ledger

    Nominal Account Debit Credit

    Creditors Control Account

    53.57

    		  
    Bank Account   53.57

  • Supplier Account

    Supplier Account Balance +100

Useful info

About payments with settlement discounts

A settlement discount is where you are offered a discount if you pay an invoice early. Your supplier usually specifies the number of days the invoice has to be paid within to qualify for the discount.

If the invoice is paid within the agreed number of days, then you claim the full discount value when you enter the payment.

  • In the UK, if the invoice is paid within the settlement discount period, VAT is only charged on the discounted amount (Goods value minus Discount value).

  • In Ireland, VAT is calculated at the goods value regardless of any settlement discount.

  1. Enter the invoice. Include the settlement discount details on the invoice. The full invoice value is posted to the supplier's account.

  2. Enter the payment. If you qualify for the discount when you pay the invoice, you'll pay the invoice total minus the discount amount. You enter this as the Cheque value and you also enter the amount of the discount.

    The discount is added to the amount paid to make sure that payment matches the invoice. This is posted to the supplier's account and the Creditors Control Account.

    The amount paid is posted to the bank account and the discount amount is posted to the Discounts Allowed nominal account.

    For example, for an invoice of £119 with a £5 settlement discount, enter the payment amount as £114 and discount amount as £5.

You offer a settlement discount of 5%:

  1. You record the details of an invoice for £100. VAT is calculated at £20. You enter the discount percentage and amount which is £5.
  2. You pay the invoice within the specified period, so you owe £114. This is the gross amount (£120) minus the net discount (£5) and the discounted VAT (5% x 20 = £1).
  3. You record the payment and enter the cheque value as £114 and add the discount value as £5. This creates a transaction value of £119.
  4. You allocate the invoice (£120) to the payment (£119). The VAT discount (£1) remains outstanding.
  5. You record a credit note for the VAT amount of £1.
  6. You allocate the credit note to the remaining balance on the invoice.
Transaction Nominal Account Debit Credit
Invoice Creditors Control   120
  Net 100  
  VAT 20  
Payment Discounts Taken   5
  Bank Account   114
  Creditors Control Account 119  
Credit Note Creditors Control Account 1  
  VAT   1

To make sure that the settlement discount details are always entered when invoices are entered for a supplier, you can add the settlement discount details to the supplier's account (Payment Terms tab). The Discount percent, Discount Days are then automatically applied each time you enter an invoice for this supplier.

You can change the discount details when entering an individual invoice if you need to. This does not update the supplier's account. If you change the Discount Value, the Discount Percent is updated and vice versa.

About foreign currency payments with bank charges

This is the amount that you are charged by your bank for processing a foreign currency payment. Depending on your bank, this charge can be shown on your bank statement in two ways:

To make it easier for you to reconcile your bank account, there are also two ways you can enter this into Sage 200.

  • As two separate transactions.

    1. Enter the payment using the Purchase Payment option.

    2. Enter the bank charge using a Nominal Non-Vatable Payment or Nominal Vatable Payment.

    This method creates two transactions which you can then match with the two transactions on your bank statement.

  • As a single transaction.

    Enter the payment and the bank charges using the Purchase Payment option.

    This method creates one transaction which you then match with the single transaction on your bank statement.

    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.

Whichever method you use, you record the payment amount in the original currency and the bank charge in the same currency as the bank account. When the payment is saved, the supplier's account balance is updated by the currency value and the bank account and nominal accounts in the sterling equivalent.

If there is an exchange rate gain or loss between the transactions, this is dealt with by Sage 200 automatically.

If you want to enter a foreign currency payment and include any bank charges incurred, you can do this by entering the bank charge details here.

This can make it easier to reconcile your bank statement, if this is how these transactions are shown on your bank statement.

Note: Enter bank charges in the same currency as the bank account.

  1. Enter the full amount of the payment in the original currency.
  2. In the Bank charges section, choose a nominal account for the bank charges. The default bank charges nominal account is displayed by default.
  3. In the Value column, enter the amount of the bank charges in same currency as the bank account.
  4. The total amount that will be posted to the bank account is shown in the Net bank cheque value after charges box. This should match the amount shown on your bank statement.
Example

You receive $100 in payment for an invoice. You pay this into your sterling bank account. Your bank charges you a 2.5% fee for foreign currency transactions. The following table shows the amount paid into the bank account in sterling.

Currency payment received

Sterling equivalent

£1 = $2.0

 2.5% charge Paid into bank account
$100 £50 £1.25 £48.75

When you record the payment, you:

  1. Enter the cheque value as $100.
  2. Enter a bank charge for £1.25.
  3. The Net bank cheque value after charges is calculated automatically as £48.75.

The following posting are made:

  • The Nominal Ledger is updated. This table shows the nominal account postings:

    Nominal Account Debit Credit
    Creditors Control Account   £50
    Bank Account

    £48.75

    		  
    Bank charges £1.25  

  • The supplier account is updated:

    Supplier Account Balance - $100

About payments with a currency gain or loss

If the exchange rate used for the payment is different to the exchange rate used for the invoice, Sage 200 automatically works out the currency gain or loss and posts it to the Nominal Ledger, when the payment is allocated. When this occurs, the following additional transactions are posted with a reference of REVALUE:

  • For a currency gain.

    Nominal Account Debit Credit
    Creditors Control Account Amount of gain

     
    Revaluation Account   Amount of gain

  • For a currency loss.

    Nominal Account Debit Credit
    Creditors Control Account  

    Amount of loss
    Revaluation Account Amount of loss  

Create rules for bank feeds reconciliation

If you enter 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.

For example, if you make a regular payment for your energy bills each month, you could set up a rule that recognises your bank payment to the energy company, and then creates the matching nominal transaction for you.

You can create bank feeds rules whenever you add a new transaction in Bank Feeds Reconciliation.

See Bank feeds rules.

Fix it

Why is the date highlighted in red?

This is because the invoice date does not fall within any of your accounting periods.

Check the date and try again.

What happens when I

Save a payment

The nominal account and customer account are updated immediately, unless the receipt is dated in a future period. In this case, the transaction is posted when the period is opened.

The following table shows the nominal account postings:

Nominal Account Debit Credit

Creditors Control Account

Payment Value

Bank Account Payment Value

The supplier's account is increased by the payment value.

Save a payment with a settlement discount

The following table shows the nominal account postings:

Nominal Account Debit Credit
Creditors Control Account Total payment value: payment +discount
Bank Account Payment Value
Discounts Allowed Discount Value

The supplier's account is increased by the total payment value.

Save a foreign currency payment

The following table shows the nominal account postings:

Nominal Account Debit Credit
Creditors Control Account Payment value in base currency
Bank Account Payment value in base currency

The bank account balance is updated by the payment amount in the bank's currency.

The supplier's account is increased by the currency payment value.

If the payment is allocated to an invoice,and there is an exchange gain or loss, the following nominal account postings are made:

Nominal Account Debit Credit
Creditors Control Account Gain Loss
Revaluation Account Loss Gain

Save a payment with bank charges

The following table shows the nominal account postings:

Nominal Account Debit Credit
Creditors Control Account Payment value
Bank Account Payment value + charge
Bank charges Charge

The supplier account is updated by the payment value in the original currency.

Save a payment for supplier that I pay using Supplier Payments

If you have set up the supplier to be paid using Supplier Payments, the payment will be submitted to your Supplier Payments account approver for authorisation.

To check the status of the payment, you can use the Supplier Payments Dashboard.

Open: Suppliers > Enter Transactions > Supplier Payments Dashboard.

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.

See also

Related information

Purchase payments

Introduction to purchases and suppliers

Other useful information

Pay a single supplier

Pay suppliers automatically with payment processing

Use a contra entry to pay a supplier who is also a customer

Prepayments and accruals