psaax2009sp1userguideupdate_paywhenpaid

7/30/2019 PSAAX2009SP1UserGuideUpdate_PayWhenPaid

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Pay when Paid


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Overview

Pay when Paid (PwP) is used to assure customer acceptance of subcontracted work and also tomanage project cash flow. This is accomplished by not paying the subcontractor until payment fortheir work is received by the end customer. Manually keeping track of which subcontract invoice isrelated to which customer invoice and selecting the appropriate subcontractor invoices for paymentcan be a very laborious task. The PwP feature within PSA automates both the relationship of

customer to subcontractor invoice as well as the subcontract invoice selection process.PwP processing can be activated at either the vendor or the project/task level. The activationvalue can also be defined at the Vendor Group and Project Contracts, and then default into therelated vendor and project.

Setup

The following section details the steps that are required to setup the Pay when Paid functionality.

I. Parameter setup

1. PSA Parameters

PSA MenuSetupPSA ParametersProject - Activity tab

a. Default Pwp setting Since both the project and the employee master files have aPwP flag, the system needs a way to determine which setting has priority over theother.

The value of the Default Pwp settingdetermines which master file setting haspriority. If the setting is set to Project Activity, then the default setting for theOverride Vendor Pwp on the project (shown below) will be checked. This meansthat the PwP setting on the project has priority.

If the value is set to Vendor, then the default setting for the Override Vendor Pwpon the project will be unchecked. This means that the PwP setting on the vendor

has priority.

b. Fully paid threshold amount this amount defines the threshold that will constitute afull payment by the customer and will therefore release payments for the relatedinvoices to the subcontractors. Usually this setting will be set to a value greater than0.00 so that vendor payments are not held up because of a very small shortpayment by the customer.

c. Fully paid threshold percent the percent defines the threshold that will constitute afull payment by the customer and will therefore release payments for the relatedinvoices to the subcontractors. Usually this setting will be set to a value greater than0.00 so that vendor payments are not held up because of a very small shortpayment by the customer.

d. Override employee expenses checking this field will allow employee expensereports to bypass the PwP process and get paid regardless of customer payment.


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II. Vendor setup

1. Vendor Group

Accounts Payable MenuSetupVendor groups

Pay when paid The value of this field, which activates PwP functionality, will default to allof the vendors who are part of the vendor group. Changing the value of this field will notupdate the PwP field on the related vendors within the Group; it will only be applied to new

vendors.


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Vendor group on the vendor form:

2. Vendor master

Accounts Payable MenuVendorPayment (tab)

Pay when paid

The value of this field identifies whether or not a vendor is subject to PwPprocessing. It will be defaulted from the related Vendor group when the vendor is initiallycreated, but can be subsequently changed.


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III. Project setup

1. Project contract

PSA MenuProject contracts

Pay when paid The value of this field identifies whether or not projects within this contractare subject to PwP processing. This will be the default setting for all projects created underthis contract.

.


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2. Project

PSA MenuProject detailsFinance (tab)

Project PwPactivation setting

Pay when paid

The value of this field identifies whether or not a project is subject toPwP processing. It will be defaulted from the related Project Contract, but can bechanged at the project level. The value of this field will default to related sub-projectsand tasks, where it can be overridden.

Override Vendor PwPsetting

Override Vendor Pwp this value is defaulted from the setting of the Default Pwpsettingfield in the Parameters, discussed earlier. When checked, the value of the PWPfield on the Project is used. If unchecked, the value of the PWP field on the Vendor isused.

Purchase Order processing

I. Create a purchase order

1. Create a PO for the project

PSA MenuProject details Item (button) Purchase order

a. Create a PO in the same fashion as is currently done

b. Review the Pay when Paidvalue on the POs Price/Discount tab. The value can bechanged on the PO.


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2. Invoice the purchase order:

II. Review purchase order-related Vendor Invoice

3. Go to Vendor Account

Accounts PayableVendor detailsTransactions (button)

a. Highlight the vendor invoice

b. Select the paymenttab

c. The Pay when paidcheckbox value is set based on the PwP values on the Projector the Vendor

d. The related project/task is presented


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Expense Journal processing

I. Create an Expense in the Exp Journal

1. Create an Expense Journal batch header

PSA MenuJournalsExpense Journal

a. Create an Expense Journal header in the same fashion as is currently done.


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2. Create the Expense Journal lines as is currently done:

a. Click on the Lines button

b. Add lines for Journal lines.

Notes:

A vendor must be entered in the Offset account field on the General tab, as that is the entitythat the expense transaction will be written against, and therefore, is the entity that has the PwPdesignation.

The Employee designation is optional. However, i f an employee is entered in the Employeefield on the overview tab, the related Vendor account may default into the previously mentionedoffset account. This depends on the designation of a related vendor on the employee record.

Also, if the Employee field is populated, the system will check the value of the OverrideEmployee Expenses box in the Parameters. If this box is checked, the employee -relatedvoucher will not be flagged as a PwP transaction, regardless of any other settings at the Projector Vendor level.

There must be an invoice number in the Invoice field on the Overview tab.

c. Post the Journal lines.


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II. Review expense-related Vendor Invoice

3. Go to Vendor Account



b. Select the paymenttab

c. The Pay when paidcheckbox value is set based on the PwP values on the Projector the Vendor

d. The related project/task is presented


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Customer invoicing and payment

Once the vendor invoices have been entered, they can be invoiced to the customer. As part of thepay-when-paid process, the system needs to cross-reference the vendor invoice to the relatedcustomer invoice on which is appears. This is so when the customer payment is subsequentlyreceived, the related vendor invoices can be updated so they can be selected for payment inAccounts Payable.

I. Create Invoice Proposal and the Invoice to the customer

1. Create an invoice for the customer

PSA MenuProject details Invoice (button) Invoice processing

a. Create a customer invoice in the same fashion as is currently done.

b. Post the invoice

2. Review the customer invoice information on the vendor invoice - PwP section



b. Select the payment tab

c. Notice that the customer invoice number is now associated with the vendor invoice

i. This cross reference will be used to ultimately link the customer payment ofthe customer invoice to the vendor invoice.


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II. Manage PwP vendor invoices

1. Review the vendor invoice that are subject to PwP

PSA Menu Inquiries Invoices for Pay when paid

a. Notice that the customer invoice number is now associated with the vendor invoice

b. The Pay when paid checkbox provides filtering on vendor invoices that are subject

to PwP (checked) or all invoices (unchecked).

c. The Status field provides filtering to see all vendor invoices, only those that areassociated to unpaid (open) customer invoices or only those that are associated topaid customer invoices.


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d. The Account typevalue defines the Accountfield. Filtering can be done by vendor,customer or project contract

2. Manually release a PwP vendor invoice to allow for payment


a. If a vendor invoice is flagged as PwP and payment needs to be made to the vendorbefore full payment is received from the customer, the vendor invoice can be

removed from PwP by clearing the Pwp flag on the record

III. Receive customer payment

1. Enter a payment from the customer

Accounts receivableJournalsPaymentsPayment journals

a. Create a customer payment in the same fashion as is currently done.

b. Post the payment (in this case we present a payment that is below the Fully paidthreshold amount/percentage setting in the Parameters).


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c. Review the impact of a partial payment in the Invoices for Pay when paid form.

d. Post the payment (in this case we present a payment that is above the Fully paidthreshold amount/percentage setting in the Parameters).

e. Review the impact of a partial payment in the Invoices for Pay when paid form.

IV. Vendor payment

1. Enter a payment for a vendor

Accounts payableJournalsPaymentsPayment journals

a. Create a customer payment in the same fashion as is currently done.

b. Review the vendor payment in the Invoices for Pay when paid form.


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V. Adjustments

1. Changing the PwP status for a vendor invoice


When a vendor invoice is on hold due to its PwP status and the vendor needs to bepaid before payment is received by the customer, the vendor invoice can bemanually removed from PwP processing.

This adjustment is available until the customer invoice is fully paid at which point,the vendors invoices are available for payment, regardless of their PwP status.

a. Check or uncheck the Pwp flagfor the appropriate purchase order or expensetransaction.

b. Process A/P payments as usual.

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