This article describes the classic vendor form. Vendor records now open in the Vendor form, which reorganizes this information into dedicated sections.
The classic view described here remains available from the Vendor form's quick actions menu using Switch to classic view.
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 select the vendor to open the vendor record.
3) In the General Tab, 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.
If payment terms are not set, the due date of the invoice will default to the invoice date. 
4) Click the Vendor Additional Info tab.
5) On the Vendor Additional Info tab, set the 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.
6) Click the toggle for Default Mark as Paid.
The Default Mark as Paid option will apply to all future invoices. It does not apply to invoices that were entered before Default Mark as Paid was enabled.
7) If payments should be made using the default bank account on the location record, leave Use Loc Bank Acct toggle on.
If ‘Use Loc Bank Acct’ is toggled on, but default bank accounts are not assigned on the location record, mark as paid will be on for invoices for the vendor, but the bank account will be left blank.
8) If payments should be created using the same account for all locations, turn Use Loc Bank Acct off.
An additional field, Bank Account, will appear.
9) If ‘Use Loc Bank Acct’ is off, use the dropdown to select the bank account that should be used for all payments to the vendor.
10) Hover over save, then select the desired save option.
Save: Save the vendor record and remain on the record.
Save and New: Save the current vendor record and open an new, blank record.
Save and Close: Save and close the current vendor record.
Default Mark as Paid on the Invoice
When Default Mark as Paid is enabled on the vendor record, Mark as Paid will be toggled on all invoices for that vendor.
Closed Periods and AP Payment Creation
When the due date falls in a closed period, no AP Payment is created — a warning appears at approval and when saving an already-approved invoice
Once the invoice has been approved, an AP Payment is created and applied to the invoice using the following information:
AP Payment date: Uses the due date from the invoice.
The due date is set by the payment terms on the vendor record. If payment terms were not set, the due date defaults to the date of the invoice.
Bank Account: Uses the location’s bank account or the bank account selected on the vendor record.
This is dependent on the Default Mark as Paid settings selected on the vendor record.
Location:
If a default location is assigned to the selected bank account, that location is used for the payment. If no default location is assigned, the payment uses the invoice header location.
