Accounts Payable

2026-02-01 · 4 min

Overview

Accounts Payable (AP) manages vendor invoice processing, payment scheduling, and vendor ledger reconciliation. Invoices flow from the GRN three-way matching process and are queued for payment based on vendor credit terms.

Invoice Processing

Process vendor invoices:

1. Invoices arrive and are matched against POs and GRNs (three-way matching).
2. Matched invoices are auto-approved. Mismatches are flagged for review.
3. Enter the invoice number, date, and due date.
4. Verify tax amounts (GST input credit).
5. Approve for payment. The invoice enters the payment queue.

Payment Processing

Schedule and execute vendor payments:

• Payment queue shows all approved invoices sorted by due date.
• Select invoices for payment (individually or in bulk by vendor).
• Choose payment mode: NEFT/RTGS, cheque, UPI, or cash.
• Generate payment advice for the vendor.
• Record payment reference (transaction ID, cheque number).
• Auto-post GL entries: Debit Accounts Payable, Credit Bank/Cash.
• TDS deduction: Auto-calculate and deduct TDS based on vendor category and section.

Vendor Ledger

View vendor-wise transaction history:

• Opening balance, invoices, debit notes, payments, and closing balance.
• Ageing analysis: Current, 30 days, 60 days, 90 days, 90+ days outstanding.
• Vendor statement generation for reconciliation.
• GST reconciliation: Match input credits against vendor invoices.

Reporting

AP reports include: Vendor-wise outstanding, payment due calendar, ageing analysis, TDS computation report, GST input credit summary, and cash flow projection for upcoming payments.

Bank Reconciliation

Reconcile bank statements against recorded transactions:

• Navigate to AP > Bank Reconciliation and select the bank account.
• Upload or enter bank statement transactions.
• The system auto-matches bank entries against recorded payments using amount, date, and reference number.
• Unmatched entries are displayed for manual reconciliation.
• Bulk reconciliation: select multiple matched entries and mark as reconciled in one click.
• Reconciliation summary shows book balance, bank balance, and the list of outstanding items.
• Monthly reconciliation history is maintained for audit trail.

Vendor Aging

Analyze outstanding payables by age bucket:

• Navigate to AP > Vendor Aging for the aging report.
• Outstanding invoices are categorized into buckets: 0-30 days, 31-60 days, 61-90 days, and 90+ days.
• View summary totals or drill down to individual vendor details.
• Identify overdue invoices requiring immediate attention.
• Filter by vendor, department, or payment priority.
• Export aging report for review by finance team or auditors.

TDS Management

Track and manage Tax Deducted at Source for vendor payments:

• TDS entries are auto-created when payments are processed based on vendor TDS category.
• View all TDS entries with vendor name, section, rate, base amount, and TDS amount.
• Filter by status: Pending, Deposited, or Filed.
• Generate TDS challans grouped by section and quarter.
• Reconcile TDS deducted against TDS deposited with the government.
• Prepare quarterly TDS returns (Form 26Q) data from the system.

Notes

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