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Payment Journals

Payment journals are used to record payments made to vendors and payments received from customers.

What is a Payment Journal?

A payment journal: - Records cash outflows (paying vendors) - Records cash inflows (customer payments received) - Updates bank account balances - Applies payments to outstanding invoices - Posts to general ledger

Types of Payments

Vendor Payments (Accounts Payable)

  • Paying vendor invoices
  • Paying vendor credit balances
  • Recording checks, ACH, wire transfers, credit card payments

Customer Payments (Accounts Receivable)

  • Recording customer payments received
  • Applying payments to customer invoices
  • Recording checks, cash, ACH, credit card receipts

Processing Vendor Payments

Step 1: Open Payment Journal

  1. Search for Payment Journals (Alt + Q)
  2. Select appropriate journal batch
  3. Click to open journal

Step 2: Create Payment Lines

Method A: Manual Entry

  1. Click + New to add line
  2. Enter fields:
  3. Posting Date - Date of payment
  4. Document Type - Payment
  5. Account Type - Vendor
  6. Account No. - Select vendor
  7. Amount - Payment amount (negative for vendor payment)
  8. Applies-to Doc. No. - Select invoice being paid
  9. Bal. Account Type - Bank Account
  10. Bal. Account No. - Select bank account
  11. Repeat for additional payments

Method B: Suggest Vendor Payments

  1. Click Actions → Suggest Vendor Payments
  2. Set filters:
  3. Due date range
  4. Which vendors
  5. Which bank account
  6. Available payment amount
  7. Click OK
  8. System suggests payments for invoices due
  9. Review and adjust as needed

Step 3: Review Payment Journal

  • Verify all amounts are correct
  • Check that invoices are properly applied
  • Confirm bank account is correct
  • Review totals at bottom

Step 4: Post the Journal

  1. Click Post in the ribbon
  2. Confirm posting
  3. System creates:
  4. Bank ledger entries (reduces bank balance)
  5. Vendor ledger entries (reduces vendor balance)
  6. Applied payment to invoice

Step 5: Print Checks (if applicable)

  1. Before posting, click Print Check
  2. Select check format
  3. Print checks
  4. Then post the journal

Processing Customer Payments

Recording Customer Payments Received

  1. Open Payment Journal
  2. Click + New to add line
  3. Enter fields:
  4. Posting Date - Date received
  5. Document Type - Payment
  6. Account Type - Customer
  7. Account No. - Select customer
  8. Amount - Payment amount (positive for customer payment)
  9. Applies-to Doc. No. - Select invoice being paid
  10. Bal. Account Type - Bank Account
  11. Bal. Account No. - Bank where deposited
  12. Click Post

Applying Payments to Invoices

Auto-Application

  • System automatically applies payment to oldest invoice
  • Or suggests based on invoice number in reference field

Manual Application

  1. On journal line, click in Applies-to Doc. No. field
  2. Click lookup button (three dots)
  3. Select invoice(s) to apply payment against
  4. Confirm application
  5. System fills in amount

Partial Payments

  • Enter actual amount received
  • System applies to invoice partially
  • Invoice remains open for remaining balance

Unapplied Payments

  • If payment doesn't match specific invoice
  • Leave Applies-to Doc. No. blank
  • Payment posts to customer/vendor account
  • Apply manually later from ledger entries

Payment Methods

Document which payment method was used: - Check - Physical check written - EFT/ACH - Electronic funds transfer - Wire Transfer - Bank wire - Credit Card - Card payment - Cash - Cash payment (rare for vendors)

Use Payment Method Code field on journal line.

Batch Payments

To pay multiple vendors at once: 1. Use Suggest Vendor Payments function 2. Review suggested payments 3. Remove any you don't want to pay yet 4. Post entire batch 5. Optionally print checks for all

Payment Discounts

Some vendors offer early payment discounts: - Terms like "2% 10 Net 30" (2% discount if paid within 10 days) - System calculates discount automatically - Verify discount is applied before posting - Adjust amount if needed

Voiding Payments

If check is voided or payment needs to be reversed: 1. Search for Posted Payment Journals or ledger entries 2. Find the payment 3. Click Reverse Transaction 4. Post reversal 5. Creates correcting entries

Best Practices

  • Post payment journals daily to keep records current
  • Match payment dates to actual check dates or transfer dates
  • Apply payments correctly to invoices to clear balances
  • Reconcile with bank statements regularly
  • Document check numbers in journal lines
  • Review before posting - cannot undo posted journals easily
  • Print checks before posting if using printed checks
  • Keep backup of payment records
  • Verify vendor names before posting to avoid misapplication

Common Scenarios

Scenario: Write Vendor Check

  1. Open payment journal
  2. Enter vendor payment line
  3. Print check
  4. Post journal
  5. Mail check to vendor

Scenario: Record Customer Check Received

  1. Receive check in mail
  2. Open payment journal
  3. Enter customer payment line
  4. Apply to invoice
  5. Post journal
  6. Make bank deposit (see Deposits)

Scenario: Pay Multiple Vendors

  1. Use "Suggest Vendor Payments"
  2. Review list
  3. Print checks for all
  4. Post batch
  5. Mail checks

Scenario: Customer Partial Payment

  1. Enter actual amount received
  2. Apply to invoice
  3. Post payment
  4. Invoice remains open for balance due

Troubleshooting

Problem: Payment posted to wrong vendor Solution: Reverse the payment, repost correctly. Contact accounting if needed.

Problem: Can't find invoice to apply payment to Solution: Verify invoice is posted. Check customer/vendor number is correct. Invoice may already be paid.

Problem: Amounts don't balance Solution: Verify bank account debits/credits. Check if amounts are entered as positive/negative correctly.

Problem: Check number sequence is wrong Solution: Adjust starting check number before printing checks.