Clients & Profits | Visual Feature Guide | Adding an Overhead Invoice

Adding an overhead invoice

Overhead invoices are added without jobs and tasks, since they don’t affect clients. But you lose some accountability on your profitability reports. Unless an invoice has a job and task, it isn’t included on profit reports -- only your agency financials. To get the best picture of your overall profitability, you might benefit by opening and using overhead job tickets. However, it’s faster to add as an overhead invoice, if you don’t require that amount of detail.

An expense invoice can have one or many invoice line items. Each line item is a separate expense account and amount. Invoice line items account for overhead expenses, such as office supplies.

If you write purchase orders, vendor invoices can reconcile your commitments automatically as they’re added. When you enter the invoice’s PO number, details from the purchase order -- vendor, terms, and amount -- are copied to the invoice. This saves time, plus makes your job costing more accurate. Also, you’ll see at a glance if the vendor is billing you for more than you authorized on the purchase order.

To add an overhead expense invoice

1 From the Accounts Payable window, choose Edit > Add New Invoice > Overhead Invoice.

2 Enter the invoice’s purchase order number, if applicable, and a line number.

If you don’t know the PO number, choose Lookup > Purchase Orders. The purchase order Lookup List lists all open POs. The list can be sorted by clicking on any column heading, making it easy to find the right PO. Double-clicking on the purchase order copies its number to this invoice. If you don’t write purchase orders, ignore the PO number -- simply tab past the PO and line fields to the vendor field. The line number is entered automatically as 1, meaning the first line item (this saves time, since many purchase order have only one line item). The line number is important, because it points to the exact line item on the purchase order. It’s the only way to reconcile POs with many line items.

If this invoice covers the entire PO, leave the PO number blank then click the distribute to many dGLs option. This option lets you enter every line item from the PO onto the invoice after this window is saved.

3 Enter the vendor number.

4 Enter the invoice number, invoice date, accounting period, and terms.

Enter the invoice number and invoice date directly from the vendor’s invoice. If the invoice doesn’t have an invoice number, enter a combination of the vendor number and the date (e.g., ABC012098). This date is important since it’s used to calculate the age of your unpaid payables on aging reports. The invoice can be posted into any unlocked accounting period. The current accounting period (from Accounting Preferences) is entered automatically, but can be changed by choosing a period from the pop-up menu.

5 Enter the invoice’s payment terms and pay date.

The payment terms are copied from the vendor account, but can be changed. If the vendor offers an early-payment discount, be sure to enter its percentage and days to pay; the A/P aging and cash flash reports will calculate the invoice’s discounted balance automatically. The pay date is day on which you’ll schedule this invoice to be paid.

6 Enter the invoice total and its credit (i.e., liability) G/L account.

The invoice total is amount you’re being charged by the vendor, including sales tax and shipping but not early-payment discounts.

7 Enter the invoice’s description and debit (i.e, expense) account.

The invoice’s description is optional, but useful for auditing. It appears on journal entries when the invoice is posted. The default overhead expense account is copied from your G/L preferences or vendor, but it can be changed. Any expense account can be used.

This invoice can be charged to many expense accounts, if needed, by clicking on the distribute to many dGLs option. If clicked, this option prompts you to enter any number of line items once the invoice is saved.

Each vendor can have a Cost dGL account that will be used when adding overhead invoices for that vendor. Just choose Vendors from the Setup menu and click on the Acct Info palette button.

8 Click Save.

Once the invoice is saved, it can be proofed, changed, or deleted at any time before it is posted. The invoice doesn’t update vendors or the General Ledger until it is posted. Posting creates debit and credit journal entries and increases the vendor’s balance. Unposted invoices don’t appear on cost, aging, or accounting reports.

Posting AP Invoices

Posting a vendor invoice updates job tickets, job tasks, the vendor account, and the General Ledger. When invoices are added, they are unposted. Unposted invoices can be easily changed, letting you edit cost amounts before the account balances are updated. Posting is a methodical process that updates vendors, jobs and tasks, and the General Ledger. The process is the same whether you’re posting one invoice or many invoices.

Entering a purchase order number here will automatically copy in the purchase order's vendor and total amount due. Each line item from the purchase order will be copied into the distribution section of the overhead invoice.

Every invoice needs a vendor number, which links the invoice with the vendor account. The invoice date should be entered from the invoice itself. It is the date the vendor issued the invoice, not the date it was received.

Enter the invoice number here. Today's date will be entered automatically, but can be changed.

The invoice can be posted into any unlocked accounting period. The period determines which month will be updated when the invoice is posted. The current accounting period is entered automatically, but can be changed by choosing a period from the pop-up menu.

To pay this invoice via online banking, select this checkbox. Online payments are added into C&P through the checkbook, just like a conventional printed check. You can record online payments into C&P as soon as you make them, or record them later from your bank statement.

If you have a PDF of the printed invoice, attach it by clicking this link. You will be prompted to locate the PDF from your hard drive or local server.

The invoice’s payment terms indicate when and how the invoice should be paid. Payment terms have three parts: the discount percentage, the early payment period in days, and the net number of days until the invoice is due. Payment terms are copied from the vendor account, but they can be customized on the invoice.

This is the amount due to the vendor for this invoice, including shipping, sales tax, and any additional charges. This is the amount you’ll pay the vendor, and not the amount you’ll bill your clients. The invoice amount updates the vendor balance.

Overhead invoices can be charged to a credit card by selecting one from the "Charged to" pop-up menu. By doing this, you can later clear overhead invoices paid by a credit card and add remaining charges in one step in the Add Credit Card Statement window.

The credit G/L account (i.e., cGL) is a liability account, and would be one of your Accounts Payable accounts. It is copied from the vendor file, but can be changed on the invoice. The cGL should always be an A/P liability account. If not, your subsidiary ledger will not equal your balance sheet.

The description explains what was purchased. It appears everywhere the invoice appears, including job cost reports and G/L journal entries. It’s customizable, so you can enter anything that helps document the invoice.

If you don't know the po's number, you can click on the Lookup link to view all open purchase orders for the vendor. Double click on a po number to select it. If you entered a PO number, the job and task are entered automatically from the purchase order; if not, you need to enter it. The markup is copied from the vendor account first, then the job task.

This is the total amount of the A/P invoice allocated to agency direct service costs, agency billings, agency income, or agency direct client hours.