Using Dynamics GP Payables to Record Expenses by Vendor without Impacting AP

Sometimes with Dynamics GP (as with any other accounting system) you just need to be creative.

A common need for Accounts Payable is to track expenses by Vendor without impacting the balance in Accounts Payable. Recently, a client wanted to record employee expenses in the employee’s AP account. However, expenses are reimbursed through an outside payroll service. This means that they wanted to track the expenses by employee but not impact the Accounts Payable subsidiary ledger or the Accounts Payable general ledger account.

The solution suggested by the client was good: Enter the expenses as AP invoices and then do a credit memo and hit the employee reimbursement account. I liked that the client would hit the employee’s AP account so that they could easily research a specific employee reimbursement later through an AP inquiry. However, this method required two entries per transaction, and there was always a chance that someone would forget to do the second part of the entry, potentially requiring AP cleanup later.

I provided a solution that was a bit out of the box. In this case, the client’s vendors never give terms discounts. We got the same results as the client’s solution with only one transaction by entering the amount for the credit memo in the Terms Discounts Taken line of the Payables Transaction Entry window:

We entered a default distribution for Terms Discount Taken of AP-Employee Reimbursement.  Thus, the distribution on this transaction was:

DR Expense

CR AP-Employee Reimbursement

There are two options for entering default distribution for Terms Discount Taken:

  1. System-Wide: Administration > Setup > Posting > Posting Accounts. Select Purchasing next to Display. On the Trade Discounts line, enter the AP-Employee Reimbursement account.
  2. Vendor Only: Purchasing > Cards > Vendors > Accounts Button. On the Trade Discounts line, enter the AP-Employee Reimbursement account.

t's an unusual solution, but very effective!