Accounts Payable

Setting up accounts payable

Creating vendor accounts

Open Vendors (Tell Me > “Vendors”) and create a new vendor card:

Key fields on the vendor card

Tab	Field	Purpose
General	No.	Vendor number (from number series)
General	Name	Vendor company name
General	Vendor Posting Group	Maps to the AP control account (DOMESTIC, FOREIGN)
General	Gen. Bus. Posting Group	Business classification for General Posting Setup (DOMESTIC, EXPORT)
Invoicing	Payment Terms Code	When invoices are due (NET30, NET60)
Invoicing	Payment Method Code	How you pay (BANK, CHECK)
Invoicing	Currency Code	Vendor’s default currency
Payments	Vendor Bank Accounts	Bank details for electronic payments
Payments	Preferred Bank Account	Default bank for payments to this vendor
Payments	Priority	Payment priority (used by Suggest Vendor Payments)

Vendor bank accounts

Each vendor can have multiple bank accounts. Set up at least one for electronic payments:

Field	Purpose
Bank Account No.	Vendor’s bank account number
Bank Branch No.	Routing/sort code
SWIFT Code	International transfers
IBAN	European/international account number
Currency Code	Currency of the bank account

Priya always sets up vendor bank accounts during migration — it’s essential for payment automation. Without bank details, Marcus can’t use the payment journal to generate electronic payments.

Purchases & Payables Setup

The Purchases & Payables Setup page (Tell Me > “Purchases & Payables Setup”) controls global AP behaviour:

Field	What It Controls
Vendor Nos.	Number series for new vendors
Invoice Nos. / Credit Memo Nos.	Number series for purchase documents
Allow VAT Difference	Can users manually adjust VAT on invoices
Ext. Doc. No. Mandatory	Require vendor invoice number on every purchase invoice
Receipt on Invoice	Auto-receive items when posting a purchase invoice
Default Posting Date	Use work date or document date as default

💡 Exam tip: Ext. Doc. No. Mandatory

The External Document No. field stores the vendor’s invoice number. Setting Ext. Doc. No. Mandatory = Yes prevents duplicate vendor invoices — if someone tries to enter an invoice with a number that already exists for that vendor, BC blocks it.

This is a common exam scenario: “How does Olivia prevent duplicate vendor invoices?” Answer: enable Ext. Doc. No. Mandatory in Purchases & Payables Setup.

Payment journals for vendors

The Payment Journal is where Marcus processes vendor payments:

1. Open Payment Journals (Tell Me > “Payment Journals”)
2. Use Suggest Vendor Payments to auto-populate:
   • Filter by due date, vendor, minimum/maximum amount
   • BC finds all open vendor entries due by the specified date
   • Creates payment lines for each vendor
3. Review and adjust the suggested payments
4. Post the payment journal

Suggest Vendor Payments settings:

Setting	What It Does
Last Payment Date	Only include entries due by this date
Available Amount	Maximum total to pay (budget cap)
Use Vendor Priority	Pay high-priority vendors first
Summarise per Vendor	One payment per vendor (combines multiple invoices)
Bal. Account Type/No.	Which bank account pays

The vendor ledger entry chain

This is the most heavily tested AP concept on the MB-800 exam. Understand these four levels:

Vendor Card
  └── Vendor Ledger Entry (VLE)
        └── Detailed Vendor Ledger Entry (DVLE)
              └── General Ledger Entry (GLE)

What each level contains

The vendor ledger entry chain

Level	What It Stores	Example
Vendor	Master data — name, address, posting groups, payment terms	Pacific Supplies Ltd
Vendor Ledger Entry (VLE)	One entry per document — invoice, credit memo, payment. Shows amount, due date, open/closed status	Invoice #2045: $5,000 due 30/04/2026, Open
Detailed Vendor Ledger Entry (DVLE)	One entry per financial event on a VLE — initial posting, payment application, discount, exchange adjustment	Initial entry: $5,000 / Payment applied: -$5,000
General Ledger Entry (GLE)	The GL impact — debit and credit entries to GL accounts	Debit: Purchase Expense $5,000 / Credit: AP $5,000

How the chain works for a purchase invoice

1. Post invoice → creates:

   • 1 VLE (the invoice record, status = Open)
   • 1 DVLE (initial amount entry)
   • Multiple GLEs (debit expense, credit AP)

2. Apply payment → creates:

   • Updates VLE (status = Closed, Remaining Amount = 0)
   • 2 DVLEs (payment application on invoice VLE, payment application on payment VLE)
   • GLEs (debit AP, credit bank)

3. Exchange rate adjustment (if foreign currency) → creates:

   • 1 DVLE (unrealised gain/loss adjustment)
   • GLEs for the FX difference

Why this matters

The exam asks questions like:

• “Where does Marcus find the remaining balance on a vendor invoice?” → Vendor Ledger Entry (Remaining Amount field)
• “Where does Olivia see the GL accounts affected by a purchase invoice?” → General Ledger Entries (navigate from the VLE)
• “How many detailed entries exist after posting and paying an invoice?” → At least 3 DVLEs (initial posting, payment applied to invoice, payment applied to payment)

ℹ️ What hits the GL and why?

When Marcus posts a $5,000 purchase invoice for office supplies from a DOMESTIC vendor buying SERVICES items:

GL Account	Debit	Credit	Source
Office Supplies Expense (from General Posting Setup: DOMESTIC + SERVICES)	$5,000		Gen. Posting Setup
Accounts Payable (from Vendor Posting Group: DOMESTIC)		$5,000	Vendor Posting Group

When he pays the invoice via the payment journal:

GL Account	Debit	Credit	Source
Accounts Payable	$5,000		Vendor Posting Group
Bank Account (from Bank Account Posting Group)		$5,000	Bank PG

Question

What is the vendor ledger entry chain?

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Answer

Vendor → Vendor Ledger Entry (one per document) → Detailed Vendor Ledger Entry (one per financial event) → General Ledger Entry (the GL impact). Each level adds more granularity.

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Question

Where do you find the remaining balance on a vendor invoice?

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Answer

On the Vendor Ledger Entry (VLE). The Remaining Amount field shows how much is still owed. When fully paid, Remaining Amount = 0 and the entry status changes to Closed.

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Question

What does Suggest Vendor Payments do?

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Answer

It scans open vendor entries due by a specified date, respects priority and amount limits, and auto-creates payment journal lines. Marcus reviews and posts the suggested payments.

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Knowledge check

Knowledge Check

Marcus posted a purchase invoice for $3,000 from vendor 'Quick Print Ltd' on March 1. On March 15, he pays $3,000. How many Detailed Vendor Ledger Entries (DVLEs) exist for this invoice after payment?

A1 — the original invoice postingB2 — the invoice posting and the paymentC3 — the invoice posting, the payment application on the invoice, and the payment application on the payment entryD4 — including a closing entry

Check Answer

Knowledge Check

Olivia wants to prevent duplicate vendor invoices from being entered in Business Central. What should she configure?

ASet up an approval workflow that checks for duplicates before postingBEnable Ext. Doc. No. Mandatory in Purchases & Payables SetupCCreate a security filter that prevents users from entering duplicate amountsDUse a number series with no gaps for purchase invoices

Check Answer

🎬 Video coming soon

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Next up: The mirror image of AP — accounts receivable. Same ledger chain concept, different direction: now it’s about what customers owe you.