Supplier purchase payment

Find this screen

Open: Purchase Ledger > Enter Transactions > Purchase Payment

Open: Cash Book > Payments and Receipts > Sales and Purchase > Purchase Payment

Note: Use either of the Purchase Payment options in the menu, there is no difference between them.

How to

Enter a supplier payment

Open: Purchase Ledger > Enter Transactions > Purchase Payment

  1. Select the Bank account.

    Note: You must have created at least one bank account to enter this type of transaction. You can't select a nominal account for this transaction in the Web Portal.

    Note: You can't enter a payment for a bank account that's used for Sage Supplier Payments using the Web Portal app. You can enter this payment in the Sage 200 desktop app instead if required.

  2. Choose the Supplier account.

  3. Enter the transaction details:

    • Enter the Transaction Date. This defaults to today's date.

    • Enter the Reference and Second reference if required.

    • Enter the Supplier payment value.

    • Enter the Early settlement discount if required.

  4. Select Save.

    This does not allocate the payment, which you can only do in the Sage 200 desktop.

Enter a foreign currency payment

If you choose a supplier that uses a foreign currency, 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.

    • To change the rate, select Change Rate. You can either enter the new exchange rate, or calculate the rate by entering the Converted value in the foreign currency.

      Note: You can only change the exchange rate if it's set to be Amendable in Currencies and Exchange Rates (in the Sage 200 desktop).

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

    Note: You can only enter Transaction Analysis details if you have enabled Allow additional transactional analysis in Supplier Defaults and Settings.

    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. Select Save.

    This does not allocate the payment, which you can only do in the Sage 200 desktop.

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

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 Currency list.

  2. Enter the Supplier payment value in the currency of the payment.

  3. If applicable, enter the settlement discount amount.

  4. Enter the Supplier payment value in the currency of the supplier, that you want to post to the supplier's account.

  5. The Exchange rate is displayed.

    • To change the rate, select Change Rate. You can either enter the new exchange rate, or calculate the rate by entering the Converted value in the foreign currency.

  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 value after charges box. This should be the same as the amount paid out of your bank account.

  8. Select Save.

    This does not allocate the payment, which you can only do in the Sage 200 desktop.

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 Currency.
  2. Enter 75 in as the value for the payment currency.
  3. Enter 100 as the value for the supplier currency.
  4. Enter the Exchange rate as 1.4.
  5. The Net value after charges shows as £53.57. This is the amount that is posted to the bank account.

  6. Save the payment.

The following updates are made:

  • Nominal Ledger

    Nominal account postings
    Nominal Account Debit Credit

    Creditors Control Account

    53.57

    		  
    Bank Account   53.57

  • Supplier Account Balance: +100

Useful info

Paying a regular supplier

You've bought something from a supplier and want to record the payment in Sage 200. You can enter payments in a number of ways - the one to use depends on whether the supplier has an account on Sage 200 and the number of invoices being paid.

There are a number of ways available for you to pay regular suppliers:

  • Record payment of a single invoice.

    When you enter payment of a single invoice you select the account of the supplier being paid, specify the payment amount and then immediately post the transaction to the supplier's account. You can also allocate the payment to invoices (in the Sage 200 desktop).

  • Use the automatic supplier payment feature (Sage 200 desktop).

    The automatic supplier payment feature enables you to select a group of invoices based on criteria such as the date on which the invoices are due, those that are a specific number of days overdue or those that would attract an early settlement discount. You then review the suggested payments for individual suppliers and can specify the amount to be paid against individual invoices. The final step is to generate the payments. In this stage you can nominate a single supplier or pay multiple suppliers (you even have some control over which suppliers are included in this group). Sage 200 posts payment transactions to supplier accounts, and can even print remittances and cheques.

    Sage 200 will allocate the specified payments to the invoices, but you can specify the allocation date that is recorded in Sage 200.

  • Enter a group of transactions (Sage 200 desktop).

    Use this to enter a single amount paid into your bank account that consists of several supplier transactions. This is useful if you've paid in a number of cheques for different suppliers at once and which appear as single receipt on your bank statement.

Paying a supplier who has no account on Sage 200

When you buy goods or services from a company you don't have a supplier account record for there will be no invoice details to link the payment to. This would be the case if you made a one-off purchase from a company you do not make regular purchases from.

In these cases you enter the payment details as a cash (nominal) payment. There are separate screens on which you can enter the details of payments that have an element of VAT and payments that have no VAT.

Payments with early 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.

  • 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.

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

  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 payment 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 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.
Example of settlement discount transactions
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 transactions are entered for a supplier, you can add the settlement discount details to the supplier's account (Payment tab). The Discount percent, Discount Days are then automatically applied each time you enter a transaction for this supplier.

You can change the discount details when entering an individual transaction 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.

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:

  • As two separate entries; the sterling value of the payment and the charge.

    Example bank charge with two entries
    Date

    Transaction description

    		 Ref. no. Debit Credit Balance
    20/01/2023 My customer 1000001   50 50
    20/01/2023 Bank service charge of £1.25   1.25   48.75

  • As a single entry; the sterling value of the payment minus the charge.

    Example bank charge with a single entry
    Date

    Transaction description

    		 Ref. no. Debit Credit Balance
    20/01/2023

    My customer

    Bank service charge of £1.25

    		 1000001   48.75 48.75

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

  • 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.

  • 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 (in the Sage 200 desktop).

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

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, provided you have chosen to Use foreign currency revaluation with your accounts (in the Customer Defaults and Settings).

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.

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.

  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 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 GBP (£) bank account. Your bank charges you a 2.5% fee for foreign currency transactions. The following shows the amount paid into the bank account in GBP.

  • Currency payment received: $100

  • Sterling equivalent (at rate £1 = $2.0): £50

  • 2.5% charge: £1.25

  • Paid into bank account: £48.75

When you record the payment, you:

  1. Enter the value as $100.
  2. Enter a bank charge for £1.25.
  3. The Net 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 postings
    Nominal Account Debit Credit
    Creditors Control Account   £50
    Bank Account

    £48.75

    		  
    Bank charges £1.25  

  • The Supplier Account Balance is updated: - $100

Payments with a currency gain or loss

If you are using Use foreign currency revaluation (Supplier Defaults and Settings), the currency gain or loss is calculated automatically.

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 additional transactions are posted with a reference of REVALUE, according to whether it is a currency gain or loss.

Nominal transactions for a currency gain
Nominal Account Debit Credit
Creditors Control Account Amount of gain

 
Revaluation Account   Amount of gain
Nominal transactions for a currency loss
Nominal Account Debit Credit
Creditors Control Account  

Amount of loss
Revaluation Account Amount of loss  

If you are not using Use foreign currency revaluation, you must post a separate nominal journal (in the Sage 200 desktop) to account for the currency gain or loss.

Fix it

You'll see warning if you have set Transaction date validation in System Settings in the Sage 200 desktop.

  • If the date entered is in the Unacceptable range, the transaction cannot be saved.

  • If the date is in the Acceptable range, the transaction can still be saved.

This could be because:

  • The supplier and bank account use the same currency. You can't change the exchange rate on the payment. The payment is posted to the Nominal Ledger using the exchange rate set in Currencies and Exchange Rates in the Sage 200 desktop.
  • The exchange rate is not set to be Amendable. To check or change this, use Currencies and Exchange Rates in the Sage 200 desktop.

What happens when I

Save a payment

If you have set the nominal ledger to update immediately in System Settings, the nominal account and supplier account are updated immediately. If the transaction is dated in a future period, it is posted when the period is opened.

If you have not set the nominal ledger to update immediately, transactions in open or closed periods are posted to the current postings file, and transactions for future periods are posted to the deferred postings file.

The following table shows the nominal account postings:

Nominal account transactions for a payment
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 transactions for a payment with a settlement discount
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 transactions for a foreign currency payment
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 you are using Foreign Account Revaluation, and there is an exchange gain or loss, the following nominal account postings are made:

Nominal account transactions using foreign account revaluation with an exchange gain or loss
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 transactions for a payment with bank charges
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.

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

Reference

Enter cash book transactions