Intuit Launches Payment Release Approvals for QuickBooks Bill Pay

Intuit has just launched Payment Release Approvals to complement the existing Bill Payment approvals within QuickBooks Bill Pay for QuickBooks Online. 

There are two sides to a Vendor Bill, each impacting different aspects of the accounting process. Accounts Payable is a general ledger account designed to reflect a company's obligation to pay a short-term debt to a vendor. Entries impacting accounts payable are considered 'accrual accounting' transactions.  

When a business makes a purchase commitment on credit, the proper accounting involves recording the Vendor's Bill as a 'credit' to Accounts Payable and a 'debit' to an expense or asset account. At this point in the transaction,"cash" has not been impacted.

When a business issues a payment for the Vendor Bill, the proper accounting involves recording the payment (whether by cash, check, or other payment means) as a 'debit' to Accounts Payable and a 'credit' to the specific 'cash account' impacted. It is only at this point in the transaction that "cash" has been impacted.

Routinely, many businesses, big and small, may have need of limiting the ability of company personnel to make purchases. The concept of 'Purchase Orders' was one of the earliest ways in which a supervisor would 'approve' purchases being requested by subordinate personnel. In many cases, Purchase Orders would be recorded as 'encumbrances' of funds that represented an 'accrual' of the liability to pay for the purchase when received and invoiced by the vendor. Other businesses would record a 'pending' Vendor Bill to perform the exact same function. The authorizing of such transactions was an 'accrual authorization.' 

When businesses are either very small so as to necessitate strict controls of a limited amounts of funds (cash on hand), or when businesses are so large that then necessitate a clear 'separation of authorities' (segregating purchasing authority from payment authority) in conformity with sound accounting 'internal controls', an additional layer of authorization rests in the ability to 'approve payments.' In the past, when most payments were made by 'paper check', that authority was typically associated with the authority to "sign checks." When the check, that was a 'cash authorization.'

Intuit has created sound 'internal controls' for Accounts Payable within their QuickBooks Bill Pay solution for QuickBooks Online. 

Accrual authorization (Bill Payment Approvals)

Previous to this month's release of Payment Release Approvals, Intuit has already built Bill Approvals into the QuickBooks Bill Pay solution. For users of Bill Pay Elite or QuickBooks Online Advanced, the process of approval of Vendor Bills can be streamlined with custom workflows designed to fit your business. To create a Bill Approval Workflow:

• In QuickBooks select Workflow Automation from the left-hand menu, then select the Templates Tab. 

• Choose Set up bill approval or Bill Multi-Condition Approval from the displayed Workflow templates, and click Create, then give your template a Name. 
• The Workflow started by event will, by default be, Bill is Created or edited.

• The default values of the When this happens block, will be Bill amount is between 0 and 1000. his is what triggers the approval process.
• Click on the block to open it so you can choose conditions from the drop-down options like Bill amount.

• In the example below, we have changed the Bill amount to Greater than or equal to 300.00. 

• You can select Add Condition if you need to add more than one. Save as you have set all conditions. 
• In this case follow the No path shown at the bottom right of the above. Click on the When this happens Bill amount is between 1001 and 5000 block (shown in the block below).

• When the block opens, click on the 'Delete' option in the lower left of the block. 

• The Delete card option block will open, click 'Delete',

• Your workflow should appear like the one below.

• Now click on the Do this workflow card on the left side of the workflow. 
• When the Do this, very the action is Request approval. Then select the name of the Approver from the drop-down list. 
• Choose how to notify the approver. Unless projects and tasks are active you will not have the ability to notify via 'task', the default will be to "Email" the approver. 
  

• Click 'Save' to finalize the template

That completes the Bill Approval workflow set-up.  Remember, this manages the 'accrual' entry for a Vendor's Bill, it does not control the 'cash' side of vendor bill payments.

How Bill Approval impacts A/P processing workflow.

When a user with the right permissions, such as a bill clerk, saves a bill that meets workflow conditions, they’re asked if they want to send it for approval. They can select Send for approval if they’re ready to notify the approver. Or, they can select Close if they want to send it later. In that case, the bill is held with a “needs approval” status until it’s sent to the bill approver.

Reviewers can view all bills pending approval on the Bills page by going to Bills and then the Unpaid tab to see all bills that are pending approval under the "Approval Status" column. 

Cash authorizations (Bill Payment Approvals)

As you might expect, the set up of a workflow for Bill Payment Approvals, the 'cash' side of the house is very similar to the Vendor Bill (Accrual) side of the house. Because of the similarities, we will not look at each step in detail as presented above. To create a Bill Payment Approval workflow:

• In QuickBooks select Workflow Automation from the left-hand menu, then select the Templates Tab. 

• Select Create on the Set up bill payments approval (New) workflow template (as shown above). Give your template a name. 

• In the When this happens block, use the drop-down to  choose conditions to trigger the Bill Payment approval process. There are options for the amount, vendor, or a combination of conditions. You can select Add Condition if you need or want additional conditions to apply. 
• In the Do this block, select the bill approver for when your set conditions are met. Note: Only admins can be approvers. 
• Repeat steps 4 and 5 to fill out additional When this happens and Do this blocks in the event that your initial conditions aren't met. (Note: If a bill payment release isn't reviewed after 30 days, it's automatically denied.)
• When finished, select Save to enable.

This completes the Bill Payment workflow set up process.

How Bill Payment Approval impacts A/P processing workflow.

Whenever a user with the right permissions, such as a bill clerk, creates a bill payment that meets workflow conditions, they’re asked to schedule and submit for approval. 

A notification will then be sent to the approvers for review and approval. 

The approver can either Approve or Reject the pending Bill Payment approval. Bill Payment approvals can also be managed from the 'Pending Approvals' tab of the Bill Payment window within QuickBooks Online by selecting Approve or Reject from the drop down Actions item. 

Remember, the Bill Payment Approval process is one of accepting responsibility for the 'cash side' of accounts payable transactions, no different than accepting authority for signing checks, or authorizing electronic funds transmittal. 

Further controls over QuickBooks Bill Pay can be put into place depending on the subscription level of either Bill Pay or QuickBooks Online. For example, it may be possible to establish customized roles and permissions related to the accounts payable process including Bill Pay. 

Disclosures:

Content (including graphic images) based on Intuit source materials, including Intuit website media source and QuickBooks Online 'help' content, as well as 'live' QuickBooks Online-Accountant screen captures. Intuit content adapted by Insightful Accountant from Intuit sources is furnished for educational purposes only.

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