Paying a vendor

What this does

When you pay a vendor for goods or services purchased, Usystems records the payment in your accounting system. This updates the vendor's balance, marks bills as paid, and creates the financial records needed for reconciliation and reporting.

Before you start

• You have a bill or bills outstanding from the vendor.
• You know the payment amount and method (cash, check, bank transfer, etc.).
• You have permission to record vendor payments.
• The vendor account exists in your system.

Steps

1. Go to Payments to create a new vendor payment. Open Payments

2. Click New Payment or Add Payment.

3. Select the vendor (payee) from the contact list.

4. Enter the payment amount you are paying.

5. Choose the payment method or account from which the payment is being made (bank account, cash, etc.).

6. Set the date of the payment (the day you made or will make the payment).

7. Review the bills the system suggests to allocate this payment to. You can:

   • Accept the default allocation (the system typically allocates to the oldest outstanding bill first).
   • Manually choose which bills to pay or pay in a different order.
   • Pay multiple bills with a single payment if the amount is large enough.

8. If the payment amount is less than the total outstanding, the system will allocate it across the bills you select and leave the remainder unpaid.

9. Add any reference or memo (such as a check number or bank transfer ID) to help track the payment.

10. Click Save or Record Payment. The vendor's balance updates and the bills marked as paid show a zero balance.

Accounting impact

When you record a vendor payment:

• The Accounts Payable balance decreases by the payment amount.
• The bank or cash account (the payment source) decreases by the payment amount.
• The vendor's account balance is reduced accordingly.
• Individual bills transition from outstanding to paid status (or partially paid if the payment did not cover the full amount).

Tips & common mistakes

• Check the vendor's total balance first: Open the vendor contact card to see all outstanding bills before making a payment.
• Overpayments: If you pay more than the vendor owes, the excess becomes a vendor advance (credit balance). You can use this credit on future purchases or refund it if needed.
• Partial payments: You can pay part of a bill now and the remainder later. The system tracks the unpaid portion.
• Match the payment date: The payment date should match the date you actually made or plan to make the payment, not the invoice date.
• Keep payment records: Save reference numbers (check numbers, bank transaction IDs) to make reconciliation easier later.