Dynamics Community Forum Thread Details

Recording customer / vendor prepayments without an invoice

Hi, Please I need some help and will really appreciate if anyone could share their experience.

All the manuals and articles I have read and videos I watched all seem to suggest that creating a prepayment invoice always comes first before a customer cash receipt or vendor payment. This is not always the case.

On a daily basis, we have some of our customers pre-pay for their orders when a prepayment invoice has not been created or sent to them and may not be created till several weeks when we expect to receive delivery from our vendors. So, we have cash in the bank from customers but no prepayment invoice. Sometimes, we also make payments for ongoing projects (no inventory item specified) without any purchase pre-payment invoice created.

My questions:

What is the best way to record these types of prepayments such that system is still able to tag the prepayment to a customer or vendor?

I have tried two options but both come with some accounting issues as follows:

Option 1 - Record a customer receipt / vendor payment using a cash receipt journal. This post negative amounts against AR and AP subledger and GL which violates the accounting rule forbidding set-off of asset and liabilities without contractual obligation to do so.

Option 2 - Record a customer receipt / vendor payment directly to the dedicated prepayment asset / liability general ledger account. The issue with this is that system doesn't tag prepayment record to a customer /vendor. So, tracking prepayments for vendors/customers and matching the payments to invoices (whenever they finally get issued and posted) is a tedious manual process. For vendors, there is the high risk of paying an invoice when a prepayment already exists for the transaction if somebody in the accounting department is away on vacation or just doesn't remember.

I believe there must be a better way with Navision and that maybe, I am simply missing something.

Appreciate any help or guidance.

Thank you.

David

Quick Links