Processing Purchase Invoice When Deduction for Garnishment is Required

This guide explains how to process a purchase invoice when a garnishment portion needs to be deducted.

You can open the purchase invoice processing by selecting Purchases > Accounts payable > Purchase invoices > select the purchase invoice to be processed.

If a company receives a purchase invoice from which a garnishment portion needs to be deducted, the invoice is in this case to be paid in two installments.

Paying a purchase invoice in two installments due to the garnishment portion proceeds as follows:

1. Pay to the vendor the amount of the invoice from which the garnishment amount has been deducted, normally to the vendor.
2. Let the system leave the invoice open for the amount of the garnishment portion as a result of the payment.
3. Pay the garnishment installment separately, for example, as a bank transfer.

Once the bank transfer has been paid and the bank transfer appears on the bank statement, the processing of the purchase invoice continues as follows:

1. Open the purchase invoice for which the garnishment portion has remained open.
2. Record a manual payment on the purchase invoice for the amount of the garnishment portion.
3. Open the bank statement on which the bank transfer of the garnishment installment appears.
4. Link the voucher to the bank statement transaction.
5. Make sure that the payment is linked to the purchase invoice, after which the purchase invoice status changes to paid.

You can open the vendor's payment prohibition settings by selecting Purchases > Vendor register > select the vendor.

In Netvisor's accounts payable, it is possible to set a payment prohibition for a vendor, which prevents the payment of all the vendor's invoices. The payment prohibition prevents the payment of all the vendor's invoices, so it does not need to be done manually for each invoice. Once the payment prohibition is set, it applies to all the vendor's invoices unless specifically restricted in the rule. If you have already set the payment prohibition in the vendor register, this handling method is ready, and no additional actions are needed for each invoice.

If 1/3 of the purchase invoices are under payment prohibition and 2/3 should be paid to the vendor, you can proceed as follows:

• First, pay 2/3 of the invoice to the vendor normally.
• Leave 1/3 of the invoice unpaid due to the payment prohibition.
• Once the payment prohibition is set in the vendor register, it automatically prevents the payment of the portion under payment prohibition.

Frequently asked questions

Question: How do I process a purchase invoice from which a garnishment portion must be deducted?
Answer: First pay to the vendor the amount of the invoice from which the garnishment amount has been deducted, and leave the garnishment portion open. Pay the garnishment installment separately as a bank transfer, record a manual payment on the purchase invoice and link the payment of the voucher to the bank statement transaction, after which the purchase invoice status changes to paid.

Question: When does the purchase invoice status change to paid after processing the garnishment portion?
Answer: The purchase invoice status changes to paid when the bank transfer of the garnishment installment appears on the bank statement, the manual payment has been recorded on the purchase invoice and the voucher has been linked to the bank statement transaction.

Question: What does the vendor's payment prohibition affect in Netvisor's accounts payable?
Answer: A payment prohibition set for a vendor prevents the payment of all the vendor's invoices, unless the payment prohibition rule has been specifically restricted. The payment prohibition does not need to be set manually for each invoice separately.

Question: How do I proceed if 1/3 of the purchase invoices are under payment prohibition and 2/3 must be paid to the vendor?
Answer: First pay 2/3 of the invoice to the vendor normally and leave 1/3 unpaid due to the payment prohibition. Once the payment prohibition is set in the vendor register, it automatically prevents the payment of the portion under payment prohibition.

Keywords: garnishment portion, garnishment, purchase invoice, manual payment, bank statement, payment prohibition, vendor register

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