Session 3

Setting up Accounts Payable (Suppliers)

Intended Learning Outcomes
At the end of this Chapter, you should be able to;

1. Explain Interactions between accounts payable and other sections in Sage 50;
2. Describe how to set suppliers defaults;
3. Explain how to create vendors ledger; and
4. Explain how to record vendor beginning balances.

3 Introduction

Accounts Payable monitors the products received from vendors (suppliers) and the money paid to them. You can
set up payment terms, aging guidelines, and more for each vendor. When transactions are posted in Accounts
Payable, the relevant journals are updated. The journals in turn update the General Ledger. The interaction
between Accounts Payable and other sections in Sage 50 is illustrated in the Figure 3.1.

Figure 3.1: Interaction between Accounts Payable and Other Sections in Sage 50

Accounts
Payable

Accounts
Receivable
Job Cost
Inventory

Journals

General
Ledger

1. Entering Suppliers Defaults

Before transactions are posted to accounts payable module in Sage, it is recommended to enter default
information relating to vendors. Default information is common information to a particular section such as
vendors, customers and etc. To access default information relating to vendors, the following steps can be
followed:
 Steps:
Click Maintain in the menu bar - Select Default Information - Click Vendors
Or

Click Vendors and Purchases Navigation Bar – Select Vendor Navigation Center – Click Set Up
Vendor Defaults

3.1.1 Vendor Defaults Window

Figure 3.2: Vendor Defaults Window

Activity 3.1
The management of Smart Fashion (Pvt) Ltd. decided to set following default information of its vendors.

Stranded Terms (Due in number of days) 3%, 30, Net 60 Days

Credit Limit Rs. 500,000
GL Inventory Account 1050-FS
GL Discount Account 4200-FS (Create a new account as Discount
Received.)
Account Aging Categories (Based on Invoice 0 to 60 days; 61 to 90 days; 91 to 120 days;
Date) Over 120 days.
Additional Fields Sales Manager, Special Note

2. Creating Vendors Ledger

The Maintain Vendors window is shown in the Figure 3.3. This window consists of four tabs, namely General,
Addresses, History, Purchase Info.

Steps to access the Maintain Vendors window:

Click Maintain in the menu bar– Select Vendors

Or
Click Vendors and Purchases Navigation Bar – Click Vendors Navigation Center – Select New Vendor
Figure 3.3: Maintain Vendors Window

a) General Tab

Once you open the Maintain Vendors Window (Figure 3.3), you will be directed to the General Tab. The General
Tab is used to add, edit and view information about your vendor.

Activity 3.2
Create the following vendor of Smart Fashion (Pvt) Ltd. in the system.

Vendor ID QA001 Select GL Account 1050-FS

Vendor Name QA Fabric (Pvt) Ltd. Telephone No 011-2659874
Contact Person Mr. Sumith Fax No. 011-2659810
Account No BOC 2500
Mailing Address No. 400 Kirulapone, E-mail qafabric@slt.lk
Colombo 5, Sri Lanka
Vendor Type Credit

b) Address Tab

Use the Addresses tab to keep track of remit to addresses for this vendor. You can also select addresses tab to use
as defaults for Payments, Purchase Orders, and Shipments. You can have up to 20 remit to addresses. The
Addresses Tab is shown in the Figure 3.4.
Figure 3.4: Address Tab
Activity 3.3
Smart Fashion (Pvt) Ltd. decided followings.

i. To copy Mailing address of QA Fabric (Pvt) Ltd. to Remit to 1 address.

ii. To create the following address in the Remit to 2 address field and set it as the Shipment address of QA
Fabric (Pvt) Ltd.
‘No. 70, Maharagama, Sri Lanka’

b) History Tab

The History tab is to view purchases, payments, and last payment information. You can also add beginning
balances here. The Figure 3.5 shows the History Tab.
Figure 3.5: History Tab

As mentioned earlier, you can enter the

beginning balances of vendors. To do
that, click the Vendor Beginning
Balance Button in the History Tab. Then
you will see the Vendor Beginning
Balances window. The Figure 5.6 shows
the Vendor Beginning Balances window.
It is recommended to enter beginning
balances of vendors once all vendors are
created in the system. Therefore, the
instructions to enter beginning balances
will be given at the latter part of this
Chapter.

Figure 3.6:Vendor Beginning Balances Window

c) Purchase Info Tab

Purchasing information such as the Purchase Rep, Tax ID Numbers, and Shipping Terms are entered on the
Purchase Info tab. Further, you can customized default terms and credit limit in this tab.
 Activity 3.4
Smart Fashion (Pvt) Ltd. Decided to select Customer Pickup as the Shipping Method of QA Fabric (Pvt) Ltd.

Activity 3.5
Create following vendor records.

1 2 3 4 5 6
Vendor ID LINEN001 COTTON00 NILE001 WOOL001 SILK001 BIN001
1
Name LINEN Cotton NILE Trading WOOL PLC SILK (Pvt) BIN
Clothing Treads (Pvt) Ltd Entertainment
Ltd
Contact Mr Sandun Ms Dilini Mr Kapila Ms Nayana Mr Udara Mr Bindu
Person
Account No BOC 2640 NDB 5623 HNB 6542 HSBC 2580 NDB 4050 HNB 5203

Mailing No. 25/4 No. 25/4 No. 310 No. 50 No. 442 No. 116
Address Maharagama Panadura Negambo Colomo 7 Homagama Colomo 10
Vendor Type Credit Credit Cash Credit Credit Credit

GL Account 1050-FS 1050-FS 1050-FS 1050-FS 1050-FS 6040-DS

Telephone 0112643445 0382234544 0314565555 0112234345 0115566123 0113535100

Fax 0112643446 0382234545 0314565555 0112234346 - -

E-mail linen@gmail.c mail@cotto niletrading@y infor@wool silk@gmail.c bin@hotmail.
om n.com ahoo.com .lk om com
Web - www.cotton - www.wool. - www.bin.com
.lk com
Remit to 2 No.510, No.22,
address Rathmalana Nugegoda

- POs and - Shipments - -

shipments are carried
are carried out using
out to this this address.
address.
Shipping Customer Courier Customer Customer Customer Courier
Method pickup pickup pickup pickup
Terms & Default Default C.O.D 2%, 20, Net Default 1%, 10, Net
Credits 60 Days 30 Days
Credit Limit Credit Limit
Rs 300,000 Rs 200,000
3. Vendor Begging Balances

Beginning balance invoices are vendor invoices that are outstanding as of the date you began to use Sage 50.
Since these bills were recorded to the appropriate accounts in your previous accounting system, they should not
affect the General Ledger in Sage 50. The balance of the Accounts Payable account in the General Ledger should
equal the total amount of the vendor beginning balances as long as no other payable transactions have been made.

How to enter the beginning balances to vendors?

Once all vendors are created in the system, you can record their beginning balances. To enter beginning balances
of vendors, you need to open Maintain Vendors window.

The steps are;

i. Click Vendor and Purchased Navigation Bar – Select Vendor Navigation Center – Click New
Vendor
Or
i. Select Maintain in the menu bar – Select Vendors.

In the Maintain Vendors Window;

ii. Go to History Tab – Click Vendor Begging Balance Button (Then you will see the Vendor Beginning
Balances Window as depicted in the Figure 5.6).

In the Vendor Beginning Balances Window;

iii. Go the Vendor Balances Tab - Select the Vendor.

iv. Enter Vendor Invoice Number – Select Invoice Date – Enter Purchased Order Number(If any) –
Enter Invoice Amount – Select Accounts Payable Account Number

Repeat Steps iii and iv until you enter balances of all vendors.

Activity 3.6
Enter following balances to vendors.

Vendor ID Invoice No. Date PO No. Amount (Rs) A/P Code

LINEN001 125 10/12/2019 PO128 130,000 2000-FS
138 17/12/2019 PO132 40,000 2000-FS
145 25/12/2019 PO140 110,000 2000-FS
COTTON001 114 02/12/2019 PO125 120,000 2000-FS
140 20/12/2019 PO138 135,000 2000-FS
NILE001 150 28/12/2019 PO118 85,000 2000-FS
SILK001 110 15/12/2019 PO130 70,000 2000-FS
120 19/12/2019 PO137 30,000 2000-FS