Lesson 6.5: Managing Purchase Orders, Invoices, and Payments
For organizations that need tighter control over their spending, FastFund Online offers a Purchase Order (PO) system integrated with the Accounts Payable module. This lesson covers the full “Procure-to-Pay” cycle: authorizing a purchase with a PO, recording the expense when the goods arrive (Vendor Invoice), and paying the liability (Pay Bills). Implementing this cycle introduces the concept of a “three-way match” (matching the PO, the Receiving Report, and the Invoice), which significantly reduces the risk of fraud and overspending.
Step 1: Creating Purchase Orders
A Purchase Order is a written authorization for a vendor to supply goods or services. In FastFund, entering a PO encumbers (sets aside) budget funds for that expense, allowing you to track “committed” funds even before the invoice arrives.
To Enter a Purchase Order:
1. Navigate to Transactions > Accounts Payable > Purchase Orders.
2. Header Info: Select the Vendor. Enter the Date, Shipping Info, and Terms.
3. Authorization: Use the Requested By and Approved By dropdowns to record who initiated and authorized the spending. Note: Only users with specific permissions can approve POs.
4. Item Details: In the bottom grid, enter the Quantity, Price, Description, and the General Ledger Expense Account.
5. Print: Check the To Be Printed box to add it to the print queue, or click Print to generate a PDF immediately to send to the vendor.
Step 2: Entering Vendor Invoices (Three-Way Match)
When the goods arrive and you receive the bill from the vendor, you must record it as a Vendor Invoice (AP-Bill). If a PO exists for this transaction, you should link them to ensure accuracy.
Linking a PO to an Invoice:
1. Navigate to Transactions > Accounts Payable > Vendor Invoices.
2. Select the Vendor.
3. Purchase Order Dropdown: If the vendor has open POs, the Purchase Order dropdown field (located under the Vendor Name) will become active. Select the specific PO number.
4. Auto-Fill: FastFund automatically populates the invoice Amount, GL Accounts, Project Codes, and Memos based on the PO data.
5. Verify: Check the invoice against the auto-filled data. If the vendor billed you a different amount (e.g., shipping costs changed), you can manually override the figures.
6. Save: Saving the invoice automatically marks the linked Purchase Order as Closed.
Step 3: Paying Vendor Bills
Once Vendor Invoices are recorded, they sit in your Accounts Payable liability account until you decide to pay them. The Pay Bills window is your cash management hub, allowing you to select which invoices to release payment for based on due dates and available cash.
To Pay Bills:
1. Navigate to Transactions > Accounts Payable > Pay Bills.
2. Review: The window lists all outstanding invoices sorted by Due Date.
3. Select: Check the boxes next to the invoices you wish to pay.
◦ Partial Payments: If you cannot pay the full amount, type a smaller figure in the Payment column. The remaining balance will stay open for a future payment cycle.
4. Generate: Click Generate Checks. This moves the selected items to the Print Checks queue (or Electronic Payments queue if using Corpay One).
Electronic Bill Payment (Optional)
If your organization uses Corpay One integrated with FastFund, you can bypass printing physical checks.
1. In the Print Checks window, click the Electronic Payments button.
2. Select the payments and click Generate Payments.
3. FastFund sends the data to Corpay One, which processes the payment via ACH, Check, or Virtual Card based on your settings.