Default mark as paid is a vendor-level setting that automatically turns on the ‘Mark as paid’ setting for all future invoices from that vendor.
This option is intended for vendors that have a one-to-one relationship between invoices and payments. When enabled, AP Payments are created and applied automatically once an invoices is approved.
Alternatively, users have the option to select Mark as paid on individual invoices.
Prerequisites
Payment Method: One of the following payment methods must be selected on the vendor record:
Auto-Direct Debit
Credit Card
One-to-One Relationship: Ensure each invoice will correspond to a single payment of the same amount. For example, an invoice for $500 should be paid with one $500 payment rather than multiple smaller payments. If payments are split or combined incorrectly, it can make transaction matching in bank activity more difficult.
Credit Memo Consideration: Consider how credit memos will be handled. Credit memos reduce the amount due on an invoice and impact the AP payment generated by the ‘Mark as paid’ function. To ensure the correct payment amount is used, apply any necessary credit memos before approving the invoice. The generated AP payment will reflect the invoice amount minus the applied credit memo.
R365 Best Practice
If these conditions are not met or cannot be confirmed with the vendor, the ‘Default mark as paid’ function is not recommend.
Enable Default Mark as Paid
Click steps to expand for additional information and images.
1) Navigate to the Vendors page and double click the vendor to open the vendor form.
2) Scroll to the Payment & accounting section and set the Payment terms for the vendor.
The payment terms set the due date for the invoice, which is used as the AP payment date when Mark as paid is enabled. Learn more about creating new payment terms.
If payment terms are not set, the due date of the invoice will default to the invoice date.
3) Set the Default payment method to Auto Direct Debit or Credit Card.
If another payment method is selected, the ‘Default mark as paid’ toggle will not be available.
4) Keep the Use location bank account toggle off if payments should be created using the same account for all locations
Use the dropdown to select the company bank account that should be used for all payments to the vendor. 
5) Turn the Use location bank account toggle on if payments should be made using each location’s default bank account.
Default bank accounts are assigned on the location record. If a location is missing a default bank account, the bank account field will be left blank on the vendor’s invoices.
6) Click the toggle for Default mark as paid.
The setting will apply to all future invoices. Existing invoices will not be marked as paid retroactively.
7) Save the changes to the vendor form.
If any other required fields are incomplete, the vendor form will automatically scroll to the first field to be completed.
Default Mark as Paid on the Invoice
When Default mark as paid is enabled on the vendor record, the ‘Mark as paid’ setting will be automatically enabled on all future invoices for that vendor.
Learn more about how an AP Payment is created and applied to the invoice following the Mark as paid setting.