This article will explain how MarginEdge uses "Payment Accounts" (hint, they are essential for exporting your data!), how you can map them and create more, plus the key mistake to avoid!
How are Payment Account Used?
The Default. MarginEdge uses Payment Accounts to indicate how an invoice is paid and whether any payment information should be sent to your accounting system. The default payment account for invoices is "Accounts Payable" - these invoices will be sent over to accounting as a bill to be paid with the invoice total crediting your A/P account.
Other Options. However, sometimes invoices are paid upon receipt, and that payment information can be uploaded to [me] with the invoice. For every payment type you might use to pay any invoices and receipts - like check, ACH/EFT, credit card - you should have a corresponding Payment Account in MarginEdge. Even if used infrequently, it's best to set up any payment accounts that might be used.
Bill Pay. The Payment Account choice will also influence what appears in Bill Pay as eligible to be paid. Only invoices closed to A/P will display automatically as unpaid invoices. All other Payment Accounts will automatically mark that bill as "Paid Externally" since the system has recorded it as already having been paid. Note that while these two features are connected as was just explained, choosing "Check" as your Payment Account does not mean MarginEdge will send that vendor a check!
If you need to set up Payment Accounts for Internal Transfers or your Commissary, please see this article.
Below is a quick video on setting up Payment Accounts.
Mapping the Default Payment Accounts
Go to Accounting > Payment Accounts from the main menu to view, add or edit your payment accounts.
Four Default Payment Accounts
If you started with us after January 2021, your payment accounts page will default with payment accounts for Accounts Payable, Checking, Credit Card, and Petty Cash as shown below. For some of you, this may be sufficient. But if you need more, there's instructions below.
Accounts Payable: LEAVE THIS BLANK.
No account mapping is needed for your Accounts Payable, MarginEdge will automatically associate this with the default A/P account in your accounting system. This is the number one mistake, don't be the one to do it!
For every other Payment Account, you are required to "map it" by associating the [me] account with your accounting system account in order for the information to export. To do this, double click in the column under "Accounting System Account" to see your Chart of Accounts. You should be able to scroll or start to type to select the appropriate one. For the few accounting systems for which MarginEdge cannot access the Chart of Accounts remotely, this field will allow you to enter text and you will have to type in the G/L account number in this field.
Checking: Map this to the the bank account you use for writing checks.
Credit Card: Map this to the account set for your credit card
Petty Cash: Map this to your petty cash/cash on hand account
When finished, be sure to click "Save Changes"!
Creating New Payment Accounts
You can have as many Payment Accounts as needed. We recommend only one Accounts Payable, but we often see multiple Credit Cards and Checking accounts.
To get started, click "Add Account" and follow the instructions below for what is needed in each column.
Set the Payment Account Name
For any account other than Accounts Payable, you can create/edit the name. Common examples of this include (where #### are the last digits):
- Checking BankX ####
- ACH/EFT *
- AMEX ####
- CCARD ####
- DEBIT CARD ####
- Petty Cash
- Paid Out
Map the Accounting System Account
To do this, double click in the column under "Accounting System Account" to see your Chart of Accounts. You should be able to scroll or start to type to select the appropriate one. More information is directly above about the details for this step!
Choose the Account Type
Account type sets how the data will be sent to your accounting system. There are three choices of account types in MarginEdge:
Accounts Payable - used typically just once as shown above. Payment accounts set to Accounts Payable will be sent as a Bill to an accounts payable account (DO NOT MAP THIS)
Checking - Invoices closed to payment accounts set as Account Type "checking" will be sent as a bill to your accounts payable along with a check payment marking the invoice as paid by the checking account mapped under the accounting system account. Checking is the account type recommended for Invoices paid with checks upon delivery.
The check number used will either be the check number you provide on the invoice, or if no check number is given, the check number is randomly generated. If you are using invoice approval to edit your Payment Accounts yourself, you'll see an "Auto-Generate Check Number" option.
See below for more information on ACH/EFT option.
Other - For payment accounts set to this category type, no invoice is sent to the accounting system, only a journal entry. Common examples include purchases with petty cash (paid-outs) and internal transfers. (Click here for information about how to book petty cash transactions with MarginEdge.). Please note that the general journal entry exported to your accounting system will not be tied to a specific vendor, the vendor will simply be referenced in the memo on the Journal Entry. As such, if you export invoice to accounting using an"Other" Type payment account, you will not need to map that MarginEdge Vendor, and if you lock a Vendor to only export invoices to an "Other" type Payment Account, the Vendor Mapping page with display "Not Applicable" in the Accounting System Vendor column.
Credit Card (only available for QuickBooks and Sage Intacct) - Invoices closed to account type "Credit Card" will report a credit card charge to the mapped account (must be a Credit Card account in QuickBooks). If no vendor is mapped, the name of the vendor paid will show up as a memo on your credit card register. If the vendor is mapped, you will see the vendor listed as the payee on the credit card register and it will appear as an expense on your Vendor transaction list for the mapped vendor. For QuickBooks Online, an image will also be exported with the Credit Card Payment Account. For more details on what Credit Card type payment account exports will look like in the accounting system, click here. *Note: Credit Card payment types cannot be mapped to a bank account.
Generally speaking, payment accounts are used to record unpaid invoices or payments made on invoices prior to upload. If you have an auto-draft arrangement with a vendor (for example Fintech), you can have those invoices marked as paid from the desired bank account and the payment will include a randomized transaction number as a check number. We recommend you map this payment account to the account the funds are drafted from.
Two things to note about this arrangement. The first is that doing this will send one check per invoice to your accounting system and the check date will match the invoice date. Since we do not know exactly when or which invoices will be included in an auto-draft, there is no way to mark invoices to reflect a future draft from your bank account for several invoices. Second, since we cannot export a check for a negative amount, credits from your vendor will be sent to your AP and not marked as paid with a check. To choose this option, follow the instructions to lock your vendor to a checking type payment account that is mapped to the balance sheet account the funds are drafted from.
Removing Payment Accounts
If you no longer need a Payment Account, but it was in use at one time and thus may still be linked to some invoices, you will need to deactivate the account as it cannot be deleted. Simply click into the final column under "Active" for the appropriate account and change it from "Yes" to "No".
A Note for Xero users
Xero accounting system does not allow manual journal entries to be posted to bank accounts. This means payment accounts set as account type "checking" or "other" cannot be mapped to a bank account in Xero. A clearing or balance sheet account must be set up and mapped for payment to be exported.