The NetSuite In-Transit Payments feature helps visualize the separate steps that payments go through. To do this, In-Transit Payments has two distinct stages: recording a payment intent and documenting the actual deposit. In this blog, we’re going to take a look at how to set up and use NetSuite In-Transit Payments. Let’s dive in!

How to Set Up In-Transit Payments

First, you’ll need to set up some things in NetSuite for In-Transit Payments.

Enable the In-Transit Payments Feature

You can enable the In-Transit Payments feature on the Advanced Features section of the Accounting tab in Enable Features. Unlike some features, In-Transit Payments cannot be turned off once it has been enabled.

Create a Cash In-Transit (CIT) Clearing Account

After enabling the feature, you’ll need to set up a Cash In-Transit (CIT) clearing account. This account will serve as a place where funds are held until the final payment has been approved. The CIT account, which you will only be able to use on journal entries and in-transit payments, should be an Other Current Liability type account.

How to Use In-Transit Payments

After setting up your account for the In-Transit Payments feature, you’re ready to start using this feature. Let’s take a look at the workflow In-Transit Payments follows.

Record the Payment Intent

First, you’ll start by recording your payment intent. On an open Vendor Bill, select the Make Payment button at the top. This will take you to the Bill Payment page. On this page, you’ll see an “In-Transit” checkbox. Selecting this checkbox will ensure that the payment goes through the in-transit process.
NetSuite In-Transit Payments Bill Payment Checkbox
Then, save the page. When an in-transit vendor payment has been created, the payment amount will post to the CIT account and the payment request will be passed on to the bank. Your AP account is not affected at this stage, since no payment has actually been made yet.

Confirm the Payment

The next stage of the process is confirming that a payment has taken place. In this stage, the bank will process the request and disburse the necessary funds to fulfill the payment request. When the bank disburses funds for the payment, the vendor payment status will switch from In-Transit to Confirmed.
At this point, your CIT account will be reversed. In addition, your AP account will be debited and your bank account will be credited to complete the transaction.

Rejected Payments

What if your bank rejects the payment request? If that happens, the vendor payment status will switch from In-Transit to Declined, and the CIT account will be reversed.

Conclusion

The NetSuite In-Transit Payments feature breaks down the payment process, allowing you to see exactly where each of your vendor payments are in the process.
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