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Supplier Pro Forma invoice

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Hello

I need help with regards to processing proforma invoices using AX2012, in line with Spanish VAT law.

In that, I want to see if there is an easier way then what we are currently doing.

This is where it gets tricky.

1) In Spain, you are not allowed to recognise a proforma as an invoice, the way we do this in AX2012 is by not populating the invoice number field, as AX will then not recognise it as an invoice and so not bring it up on invoice reports.

2) I cannot just journal the VAT element using a general journal once the actual invoice arrives due to point one, because the invoice will never ever be recognised then.

3) Our company has controls in place with regards to making payments, one of which is that you can only generate payment journals from open entries on supplier accounts. You cannot create a payment journal from nothing (eg like a prepayment journal), which then sits on the supplier account and is only cleared down when the actual invoice is received and processed.

The current process we have is as follows.

1) Process the proforma with no invoice number, so it is an open item on the supplier account and can be paid in line with our controls, but at the same time it is not recognised as an invoice

2) when the actual invoice arrives, reverse the proforma and process the actual VAT invoice onto the supplier account, then match these two entries off so they are not paid. That way, the actual invoice is now recognised, VAT is recorded correctly, and the proforma equals zero and has never been recognised as an invoice.

Is there a simpler way of doing this, but still following these rules.

Could I use Purchase Orders, I see there is a 'proforma' button next to the 'invoice' button you would use to process an invoice from a purchase order. If so, if the PO has VAT on it, does it post the vat, and if not, how do you adjust the VAT when the actual invoice arrives.

Or, if I populate the invoice number field on a general journal, would this make AX recognise it as an invoice.

Any guidance or help would be greatly appreciated.

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Ludwig Reinhard Microsoft Employee on at

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Hi brassodin,

Why are you recording a proforma invoice at all?

If Spanish law does not allow for it, why can't you wait until the actual invoice arrives?

Best regards,

Ludwig

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Hello

Many thanks for getting back to me.

We have to pay the pro forma for the goods/services before they are supplied. Once payment has been made and the goods/services have been supplied then the supplier will issue a VAT invoice.

My dilemma is company policy states we are only allowed to create payments from open items on the vendor account. I can't just create a prepayment journal

But Spanish law states you are not allowed to recognise that transaction till you have an actual VAT invoice

With UK pro forma transactions we do, the pro forma is recognised as an invoice but with no VAT, so I can just journal the VAT element to the G/L when the VAT invoice arrives. Which is easier.

Kind regards

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Ludwig Reinhard Microsoft Employee on at

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Hello brassodin,

So your proforma invoice is actually a pre-payment invoice that does not allow you deducting the VAT but that you need to enter in order to make the prepayment. Is that right?

Best regards,

Ludwig

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Hello

In essence yes.

We need to prepay the pro forma invoice in full with no vat, without recognising it as an invoice.

Then when the VAT invoice arrives later on, recognise the invoice in full with VAT

Regards

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Ludwig Reinhard Microsoft Employee on at

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Hi brassodin,

Can't you make use of the standard prepayment features then?

I once summarized different options how this can be realized here:

dynamicsax-fico.com/.../prepayments

Doesn't one of those options work for you?

I am especially thinking about option 3 listed on that page.

Best regards,

Ludwig

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Hello

I think I have it, but please can you confirm if I have this wrong.

Say I have an invoice for £120.00, which will eventually be for £100.00 Net and £20.00 VAT.

1) create a vendor posting Profile for 'Prepayments' that go to say ledger account 132200.

2) create a new category 'prepayment' with no VAT

3) create a new PO with a line using the category for that product in question, say '140200 computer' for £100.00 + VAT

4) On the purchase order / purchase / prepayment, select 'prepayment and £120.00

5) Create a payment journal, in lines select 'prepayment' and click generate.

6) this will bring up the prepayment for £120.00 which can be paid to the supplier, this payment journal will appear on the vendor account itself for £120.00.

7) when the actual invoice arrives, go to PO / Invoice / settle open transactions and select the prepayment that has been made, add invoice number etc and post. This will reverse the prepayment and post the actual costs; and the invoice will then also appear on the vendor account along with the payment journal.

The transactions on the ledger will be as follows

Payment of prepayment invoice

DB 132200 Prepayment £120.00

CR 110130 Bank £120.00

Final invoice

DB 140200 Computer £100.00

DB 130800 VAT £20.00

CR 132200 Prepayment £120.00

Thankyou again for this assistance.

Kind regards

Carlo

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Ludwig Reinhard Microsoft Employee on at

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Hello Carlo,

The steps that you describe above look fine.

I cannot see a mistake from there.

Best regards,

Ludwig

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Many thanks for your help with this matter.

Your guidance has been greatly appreciated.

Going to trail it in the test environment now.

Many thanks again

Carlo

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Ludwig Reinhard Microsoft Employee on at

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Hi Carlo,

If you Need any additional help/support, please continue posting to this thread to let us know.

Many thanks and best regards,

Ludwig

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Hello

Me again :-)

I have another couple of questions you may be able to help with. These should be quite simpler than my Spanish dilemma.

1) we do a lot of prepayments in the UK, by where we pay for large quantites of goods upfront and order them as we need them until we close the contract and receive either a credit or an invoice from the supplier for the balance remianing.

Can you tell me if the process below is correct with regards to using the prepayment functionality in AX2012

Example:

We pay upfront for 10 laptops @ £100.00 each, invoice is for £1000.00

We create a 'prepayment posting profile' (ledger 9224 prepayment).

We create a PO with one line for 10 units at £100.00 unit price (ledger 2001 computer).

We click 'prepayment' on the PO and enter £1000.00

We click 'prepayment invoice' and post an invoice onto the vendor account for £1000.00

We pay the invoice as normal using a 'payment journal'.

During the month we receive against the PO say 9 laptops.

We close the contract with the supplier who then issues us a credit for 1 laptop for £100.00.

This is where I need clarification if this is correct.

Go to PO and click 'invoice', next click 'apply prepayment'.

Will doing this (ledger speaking), reverse the original prepayment of £1000.00 currently sat on the ledger and post the £900.00 to computers on the ledger, indicated by a credit balance sat on the vendor account for -£100.00.

ie

1) Prepayment invoice

£1000.00 (9224 prepayment Ledger)

Total on vendor account £1000.00

2) Final invoice/credit

-£1000.00 (9224 prepayment Ledger)

£900.00 (2001 computer ledger)

Total on vendor account -£100.00

2)

Finally, we have a report created in an older version of AX, which identifies each "open" Prepaid Purchase Order in a table with columns as follows:

1) Purchase Order Number

2) Value prepaid

3) Value of goods received so far

4) Value of balance left on contract

Is there such a report in AX2012 that identifies prepaid purchase orders like this?

Again, many tanks for your help.

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