Step 3: Accounts Payable & Accounts Receivable Setup

Now that the General Ledger is ready to go all other modules can be setup and utilized.

In this section we’ll cover the following:

  • Aging Periods
  • Classes
  • Default Accounts

You’ll likely be using the accounts payable and accounts receivable functions in Dynamics GP, so let’s take a look at how to set this up.

Accounts Payable 1

The first thing to do is to perform the Payables Management Setup. Navigate to: Purchasing >> Setup >> Payables.

There are two key areas to complete here. The first thing you’ll want to do is to define your payables aging periods. You can have up to seven periods. You can have each period be as long in duration as you’d like, and you can name each period as you’d like. There are various other options you should review and consider. Here is the Payables Management Setup screen with a four period aging schedule:

Accounts Payable 2

I usually recommend changing the Check Format to Stub on top/bottom – Graphical. This will print on blank check stock with all formatting needed.

Next I recommend that you set up at least one Vendor Class. Vendor classes can be used to group your vendors for easier reporting, editing, and data entry. Access the Vendor Class Setup screen by clicking on the “Classes” button at the bottom of the Payables Management Setup screen.

Accounts Payable 3

The Class ID is user defined and can be up to 15 characters long. You should check the “Default” box on the first Class ID you create so that much of the information will become the default values when you create additional Class ID’s.

Accounts Payable 4

You will want to mark all four “Maintain History” selections. Also click on the “Accounts” button and identify the account numbers for the transaction types listed.

Make sure to select to Maintain History for Calendar Year, Fiscal Year, Transaction, and Distribution by selecting the check boxes as indicated above. Not selecting these will limit your ability to drill back on data.

Accounts Payable 5

 

It is not necessary to select an account for every transaction distribution type. If a transaction distribution type is used in a transaction and contains no default account number, the transaction will be able to be saved in a batch, but you won’t be able to post it. If the account is missing for a specific transaction, you merely need to enter an account number.

Accounts Payable 6

By default GP is setup with 1099 settings for Dividend, Interest, and Miscellaneous vendors. The 1099 setup window is also in the Payables setup window.

 

Receivables Setup

The next thing to do is to perform the Receivables Management Setup. Navigate to: Sales>>Setup>>Receivables.

There are two key areas to complete here. The first thing you’ll want to do is to define your receivables aging periods. You can have up to seven periods. You can have each period be as long in duration as you’d like, and you can name each period as you’d like. One thing to note is if you add more than four aging periods in the setup window the Trial Balance report will need to be updated with extra aging buckets.

There are various other options you should review and consider. Here is the Receivables Management Setup screen with a seven period aging schedule

Accounts Payable 7

Next I recommend that you set up at least one Customer Class. Customer classes are similar to vendor classes in that they can be used to group your vendors for easier reporting, editing, and data entry. Access the Customer Class Setup screen by clicking on the “Classes” button at the bottom of the Receivables Management Setup screen.

The Class ID is user defined and can be up to 15 characters long. You should check the “Default” box on the first Class ID you create so that much of the information will become the default values when you create additional Class ID’s.

You will want to mark all four “Maintain History” selections. Also click on the “Accounts” button and identify the account numbers for the transaction types listed.

Here are the two relevant screens:

Accounts Payable 8

Make sure to select to Maintain History for Calendar Year, Fiscal Year, Transaction, and Distribution by selecting the check boxes as indicated above. Not selecting these will limit your ability to drill back on data. I often set a credit limit as well for customers. You can put the amount in that is appropriate for your business.

Accounts Payable 9

It is not necessary to select an account for every transaction distribution type. If a transaction distribution type is used in a transaction and contains no default account number, the transaction will be able to be saved in a batch, but you won’t be able to post it. If the account is missing for a specific transaction, you merely need to enter an account number.

Take a look at this video to see this in action: Accounts Payable and Accounts
Receivables Setup in Dynamics GP