Settle Employee Custody via Purchase Invoice

Permissions

• Add Employee Custody and Edit Employee Custody permissions are required to access the Add and Edit Settlement screens.

Add a Settlement via Purchase Invoice

Steps to Add

• From the main menu, click Finance, then select Employee Custody.
• Click the required employee custody, then click Add Settlement from the actions bar.
• From the Add Settlement screen, select Purchase Invoice from the “Settle via” dropdown instead of the default “Account” option.
• When this option is selected, the Reference field changes from the chart of accounts list to a purchase invoice dropdown that displays the invoice number and supplier name. You can search by either of them.
• Enter the Amount to be settled from the selected invoice.
• Click Save to complete the settlement.

Purchase Invoice List Content

• Only invoices with an Unpaid or Partially Paid status are displayed. Fully paid invoices do not appear in the available options.
• If the Branches application is enabled, only invoices within the branches accessible to the current user are displayed.
• If no eligible invoices are available, the following message is displayed: “No unpaid purchase invoices found.”
• Below the selected invoice, “Outstanding: [amount] [currency]” is displayed to show the remaining balance on that invoice.

Note: If the “Mark Invoices As Already Paid by Default” option is enabled in the settings, the “Purchase Invoice” option is automatically hidden from the “Settle via” list without displaying any notification.

Amount Validation Rules

• The Amount field is required and must be a number greater than zero.
• The entered amount must not exceed the outstanding balance of the selected invoice. Otherwise, the following message is displayed: “The amount exceeds the outstanding balance of this invoice.”

How the System Works When Saving

When a settlement via a purchase invoice is saved, the System automatically performs the following:

• Creates a payment record on the purchase invoice:
  • Payment Method: Employee Custody
  • Reference: Custody code.
  • This payment is read-only from the purchase invoice side and cannot be edited or deleted directly from there.
• Automatically updates the invoice status:
  • If the amount equals the full outstanding balance: the status changes to Paid.
  • If the amount is less than the outstanding balance: the status changes to Partially Paid.
• Automatically creates a journal entry:
  • Debit: Accounts Payable (the supplier linked to the invoice).
  • Credit: Employee Advance Account (the account linked to the custody).
  • Description: “Custody Settlement – Purchase Invoice #[Invoice No]”.
• Updates the custody’s Current Remaining Balance and Balance After Settlement directly on the screen.
• Displays the success message: “Settlement saved successfully.”

Edit a Settlement via Purchase Invoice

• The Edit screen contains the same fields and behavior as the Add screen, with the previously saved values populated.
• If the linked invoice is fully paid: the row becomes read-only, and the Settle via, Reference, and Amount fields are locked. These fields cannot be edited until the invoice payment is reversed by creating a Purchase Refund.
• If the linked invoice is partially paid: the row remains editable, and any change to the amount automatically updates the payment on the invoice and the related journal entry.

View Settlements in the List and Details

Settlement List

• A “Settle via” column appears in the Settlement List table, showing the selected option for each row: Account or Purchase Invoice.
• The “Reference” column displays the account name for Account rows or the invoice number for Purchase Invoice rows.

Settlement Details

• The Details screen displays all settlement rows with their Settle via and Reference values.
• Account rows: The Reference field is displayed as plain text (the account name), as in the current behavior.
• Purchase Invoice rows: The invoice number is displayed as a clickable link that opens the Purchase Invoice view screen, subject to the user’s purchase invoice viewing permission.

Delete a Settlement Row (Settle via = Purchase Invoice)

If the linked invoice is partially paid or fully paid: deletion is allowed. When deleted, the following actions are performed automatically:

• The payment recorded on the invoice is reversed.
• The related journal entry is reversed.
• The invoice status is restored to its previous status.
• The custody balance is restored.

Purchase Refund Behavior

If a Purchase Refund is created for an invoice that was paid through an employee custody settlement, the refund is processed normally through the Purchases module without affecting the employee custody settlement row itself. The refunded amount is returned to the treasury originally linked to the custody.

Notes

• The custody payment cannot be edited or deleted from the Purchase Invoice screen. If the user attempts to do so, they are directed to the Settlement module to make the change from the source.
• The journal entry is created normally, like any other settlement, as soon as the settlement is saved.