Options for company setup

Much of your accounts payable company structure is dictated by your general ledger company structure. Here are important guidelines to keep in mind:

  • Each accounts payable company must have a corresponding general ledger company.

  • You can have multiple general ledger companies, and only one accounts payable company, but you will never have more accounts payable companies than you have general ledger companies.

  • If you have only one general ledger company, use process levels to further organize your structure.

When you define an accounts payable company, you assign the company to a pay group and a vendor group, select invoice release options, and define company defaulting, posting, processing, and reporting options. When you are determining how many companies you want to define, take into consideration that each company can have only one:

  • base currency

  • vendor group

  • invoice release option

The matching process from Invoice Matching puts invoices in a released status

Pay group considerations

Pay groups, which were introduced in the previous chapter, provide additional options for your company structure. Pay groups are above company in the company structure; you can use them to join one or more companies together for payment processing. Defining a pay group

Intercompany relationships

If you have two or more Accounts Payable companies, you can define relationships between them and process intercompany invoices. For example, you can expense an invoice to multiple companies even though only one company is responsible for the payment. The system keeps all companies in balance by using intercompany receivable and payable accounts defined for each company.

You define a relationship between two companies in General Ledger, using Intercompany Relationships (GL25.1). For more information about intercompany relationships, see the General Ledger User Guide. An example of how Accounts Payable manages intercompany transactions is in Appendix A. Intercompany transaction