Scenario application:

Vendor A and B are both external Subcontractors that work in the same industry. Company ABC employs Vendor A to perform work on a job site. Vendor A is unable to complete the work to the correct standard and Company ABC employs vendor B to complete the work. Both Vendor A and B send invoices to Company ABC for processing. Company ABC would like to capture and pay the full invoice of Vendor B but would like to charge back the same amount plus a 20% margin on top of it to Vendor A's account. Vendor A's account would therefore contain Vendor A's invoice and a credit amounting to Vendor B's invoice plus a margin of 20%.

Solution:
Include a back-charge option which is selectable on any AP invoice, in this case Vendor B's invoice would have it selected. This would trigger the option to Add a second AP Vendor (Vendor A) and include a margin %. This is more efficient than raising corresponding AP credits to the Vendor A account.

by: Dan B. | 2 months ago | Accounts Payable