@CU22080533-4
The VAT GL error is caused by a subledger tax imbalance — Prepayment Invoice 3 was posted to the GL and VAT books but never paid or applied, so when you try to post the standard invoice the tax engine cannot reconcile the outstanding prepayment liability. You cannot directly reverse a PO-linked prepayment invoice once tax distributions are locked by the procurement lifecycle.
Exact resolution — 4 steps:
Step 1 — Post a corrective Vendor Credit Note for Prepayment Invoice 3
Create a negative invoice or vendor credit note for 500 + 50 tax — use the exact same tax code and posting profile as the original prepayment invoice. This offsets the VAT GL entry that was posted but never settled.
Step 2 — Settle the credit note against Prepayment Invoice 3
Go to Accounts payable > Vendors > All vendors > select the vendor > Transactions — locate Prepayment Invoice 3 and the credit note — click Settle transactions — mark both and update. This clears the open balance and neutralizes the unpaid prepayment liability and its tax impact.
Step 3 — Adjust the prepayment on the PO
Open the Purchase Order > Prepayment fasttab — confirm the prepayment configuration now reflects only what was actually paid — Invoices 1 and 2 totalling 2000 + 200 tax.
Step 4 — Post the standard vendor invoice
On the invoice posting form click Prepayment > Select prepayments — explicitly select Prepayment Invoice 1 and Prepayment Invoice 2 only — leave Prepayment Invoice 3 out. The VAT engine will now calculate the remaining net tax balance correctly and the standard invoice will post without error.
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