Secondary Payees

Working with 4-Accounts Payable > 4-4 Vendors (Accounts Payable) > Secondary Payees

Secondary Payees

The Secondary Payees window provides a way to add secondary payees to invoices. Secondary payees are most often involved with subcontractor invoices because they have sub-vendor suppliers who have lien rights to the project. It is critical to ensure that these suppliers get paid. The use of two-party checks provides this assurance.

There are several ways to enter the secondary payees. You can do so when you enter a new subcontractor’s invoice in the 4-2 Payable Invoices/Credits window by entering the name and amount payable to each supplier in the Secondary Payees window. You can also add one or more secondary payees to existing vendor invoices.

You will notice upon looking at the Secondary Payees window that it has three main parts: the grid, the vendor line, and the totals line.

Grid Columns	Description
Secondary Payee	The name for the second party that will appear on the two-party check.
Amount	The total amount that should be paid on two-party checks to the payee.
Paid	The total amount of payment made to this payee. This column is not editable.
Balance	The Amount minus the Paid as calculated by Sage 100 Contractor. This column is not editable.
To Pay	The amount scheduled for a two-party check. This column allows you to enter or edit the amount.

The vendor line appears under the grid. The information in the vendor line reflects information related to the grid columns for the vendor on the invoice.

Vendor Line	Description
Vendor Name	Displays the vendor name and the invoice information that applies directly to the vendor.
Amount	The amount is reduced as entry is made in the Amount column in the grid. In other words, the vendor receives whatever funds remain after the secondary payee(s) are paid.
Paid	The total amount of payment that has been made directly to the vendor.
Balance	The Amount minus the Paid. It is likewise adjusted whenever the Amount on this line changes.
To Pay	The amount scheduled for payment directly to the vendor. This text box allows you to enter or edit the amount.

The totals line appears under the double line and reflects the entire invoice. The To Pay total reflects the sum of all To Pay amounts on this window. Upon saving it is sent back to its corresponding field at the bottom of the 4-2 Payable Invoices/Credits window.

Retention values are not reflected on this window. Retention that is entered on 4-2 Payable Invoices/Credits is held against the vendor’s balance. You cannot hold a portion of the invoice retention against a secondary payee. However, you can pay 90% on one check and the remaining 10% on a later check.

Discounts are not reflected on this screen. They are applied against the vendor’s balance. You cannot apply a portion of the invoice’s discount against the balance of a secondary payee.

After saving the information in the Secondary Payees window and subsequently the 4-2 Payable Invoices/Credits window, the next logical step could be to print and post the checks using the 4-3 Vendor Payments window. You will notice that the single invoice appears in the grid as multiple lines with the second payee lines directly under the vendor's portion. When you sort the grid, these lines stay together.

Here is an example. Suppose you subcontracted the electrical work on the construction of a home. Upon completion of the job, the subcontractor sends an $8,500 invoice, the amount of the contract. The invoice lists three suppliers and the associated costs: a materials supplier—$2,000; a lighting supplier—$1,500; and an equipment supplier for a backhoe to perform ground work—$300. To ensure that each of the subcontractor’s suppliers is paid, you can print a two-party check for each supplier.

When you print checks from the 4-3 Vendor Payments window, Sage 100 Contractor prints four checks based on the amounts in the Secondary Payees window. A check to the subcontractor and materials supplier for $2,000; a check to the subcontractor and lighting supplier for $1,500; a check to the subcontractor and equipment supplier for $300; and a check to the subcontractor for $4,700, which is the vendor’s portion that is not attributed to a second payee.

Notes:

No information on the Secondary Payees window may be edited when the invoice has a status of 4-Paid or 5-Void.
You can add multiple additional secondary payees to an invoice.
You can change amounts to be paid to secondary payees as long as no payment has been made.
You can change the name of the secondary payee as long as no payments have been made.
You can remove secondary payees as long as no payments have been made.

Entering payable invoices that include secondary payees

In your contracting work, you receive a payable invoice from a new vendor for their work. Part of the invoice is to be paid as a two-party check to one of their suppliers. Use the following procedure to handle this situation.

Notes:

You must manually click the Wk/Comp button and the Use Tax button in order for the record to calculate the vendor's workers' compensation rate and use tax rate. You can set up the use tax rate and the compensation rate on the Invoice Default tab of 4-4 Vendors (Accounts Payable).
Payable invoice status can be: 1-Open, 2-Review, 3-Dispute, 4-Paid, or 5-Void.
Payable invoices can have two different types: 1-Contract and 2-Memo.
Payable invoices can be saved as: Save, Save/Set To Pay, and Save/Autocost.
If you enter an invoice using information from a purchase order, the sales tax will automatically default into the invoice. You can choose to deactivate the automatic sales tax feature and to enter the sales tax manually.

To enter a payable invoice that includes a secondary payee

Open 4-2 Payable Invoices/Credits.

Do the following:

In the Invoice# box, enter the invoice number.

If the invoice is for a purchase order, in the Order# box enter the purchase order number.

If the invoice is for a subcontract, in the Contract# box enter the subcontract number. You can turn on an option to verify the contract balance against the invoice.

In the Vendor box, enter the vendor number.

In the Job box, enter the job number.

If the job uses phases, enter the phase number in the Phase box.

In the Description box, enter a description.

In the Invoice Date box, enter the date of the invoice.

In the Due Date box, enter the invoice due date.

In the Discount Date box, enter the discount due date. This is the last day by which the vendor can receive payment for you to receive a discount.

In the Shipping# box, enter the shipping tag or ticket number.

In the Reference# box, enter an invoice or credit number to apply this entry to.

In the Status list, click the invoice status.

In the Type list, click the invoice type.

In the grid, do the following:

In the Description cell, enter a brief statement about the item.

In the Price cell, enter the price per unit.

In the Account cell, enter the ledger account number.

Repeat step 3 for each item.

Below the grid, in the Discount box, enter the discount for early payment. By default, Sage 100 Contractor calculates the discount amount using the rate from the vendor record.

In the Retention box, enter the amount of retention. By default, Sage 100 Contractor calculates the retention (if applicable) using the rate from the subcontract, which is found on 6-7-1 Subcontracts.

Click the Secondary Payees button. The Secondary Payees window opens.

In the Second Payee column, enter the name of the secondary payee.

In the Amount column, enter the amount payable to the secondary payee.

Click the Save toolbar button, which saves your entries and closes the window.

When considering Workers’ Compensation rates and use tax:

If the vendor is set up with a Workers’ Compensation rate, and you want it to be calculated with this record, click the Wk/Comp button.

If the vendor is set up with a use tax rate and you want it to be calculated with this record, click the Use Tax button.

Important! You have to manually click the Wk/Comp button and the Use Tax button in order for the record to calculate the vendor's Workers' Compensation rate and use tax rate. You can set up the use tax rate and the Workers' Compensation rate on the Invoice Details tab of 4-4 Vendors (Accounts Payable).

In 4-2 Payable Invoices/Credits, click Save.

Adding secondary payees to existing payable invoices

Note: You can add secondary payees as long as the amount does not cause the vendor’s balance to become negative.

In your contracting work, you receive and enter a payable invoice from a existing vendor for subcontract work. You enter and save the invoice, which exists in your database with a record number. Subsequently the contractor informs you that a portion of that invoice should be paid as a two-party check to one of the vendor’s suppliers. Use the following procedure to handle this situation.

Increasing amounts payable to second payees

Important! You can increase the amount payable to secondary payees as long as the amount does not cause the vendor’s balance to become negative.

In your contracting work, you enter and save a payable invoice from a vendor for their work. The invoice is to be paid with one check going to the vendor in addition to a two-party check going to one of their suppliers. The vendor requests that you increase the amount of the two-party check. Use the following procedure to handle this scenario.

Decreasing amounts payable to secondary payees

Important! The amount to be paid to secondary payees cannot be decreased to less than the amount already paid.

In your contracting work, you enter and save a payable invoice from a vendor for their work. The invoice is to be paid with one check going to the vendor in addition to a two-party check going to one of their suppliers. The vendor requests that you decrease the amount of the two-party check. Use the following procedure to handle this situation.

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