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Multiple Prepayments to a vendor for a single PO

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Posted on by kimberley5231

We have the following scenario and are trying to figure out a better way to handle it since we are not actually receiving anything for the initial required payments.

Purchase a large item from a vendor for one of our projects, the vendor requires multiple prepayments, say 10% down, then 30% then 50%, then a final 10% on delivery.

What we have been doing is saying that we are receiving .1 of the item for the first prepayment and so on to correspond to the agreement with the vendor.

Is there a way to do multiple prepayments for a vendor on a PO? I can only see how to do one per PO.

Is there a better way to do this?

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Madhuri21 44 on at

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Do you have any solution to this ?

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Jay Rocha 23 on at

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I found this: https://www.youtube.com/watch?v=AcVm-TwzgZc

Mechanically, it works, but the from an accounting perspective, the entire amount will sit in the prepaid GL account, and not just whatever the true prepayment amount is.

E.g., You have to setup your PO for 100% prepayment, and the entire amount of the PO will sit in prepaids. However, on your payment journal, you can pay whatever amount per the terms.

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Jay Rocha 23 on at

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See my post below.

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KasparsSemjonovs 4,766 Super User 2025 Season 2 on at

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On PO initially add 10% prepayment, add Vendor Invoice No. and create prepayment invoice.

Afterwards Re-open PO, change the prepayment % to 40%, change the Vendor Invoice No., and issue another prepayment invoice

Afterwards Re-open PO, change the prepayment % to 90%, change the Vendor Invoice No., and issue another prepayment invoice

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YL-18111736-0 6 on at

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I received an error when tried to follow the suggestion of reopening the PO and changing the prepayment %. It didn't work.

Screenshot 2025-1...

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OussamaSabbouh 5,987 on at

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Hello,

You cannot change the Prepayment % after a prepayment invoice has already been posted.

Even reopening the purchase order won’t help.

To change the percentage, you must first cancel or correct the posted prepayment invoice.

Only then will Business Central allow you to enter a new Prepayment %.

Regards,

Oussama Sabbouh

1 people found this reply helpful.

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Teagen Boll 663 on at

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The only solution I found for this was to either create a customization or find an app to perform this function. An alternative is a work around where you would just create invoices manually and on your invoice lines set the lines as your prepayment GL account. Then when post the invoice for the order that was prepaid you can "pay" that invoice by balancing the payment line against the prepaid GL account. So the ultimate result is but it's absolutely not ideal and I wish Microsoft would address this already.

1. Order Created

2. Prepayment Invoice 1 created

-Debit - Prepayment Account

-Credit - Accounts Payable

3. Post payment for Prepayment Invoice 1

-Debit - Accounts Payable

-Credit - Cash

4. Repeat steps 2 and 3 as needed for other prepayments

5. Invoice received for Order

-Debit - Inventory/Other Accounts

-Credit - Accounts Payable

6. Post payment for Invoice using the prepayment account as the balancing account

-Debit - Accounts Payable

-Credit - Prepayment Account

It's a pretty terrible approach so i've seen a lot of end users customize the system to allow multiple prepayments.

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YUN ZHU 95,548 Super User 2025 Season 2 on at

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Although I don't recommend it, you can try the following method.

Dynamics 365 Business Central: Can we skip/ignore field validation errors?

https://yzhums.com/44435/

Thanks.

ZHU

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Jainam M. Kothari 15,639 Super User 2025 Season 2 on at

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Hello,

Business Central only supports one prepayment per purchase order by default, so your workaround of receiving fractional quantities isn’t ideal because it distorts inventory and costing.

A better approach is to either

(1) use a Blanket Purchase Order for the full amount and create separate POs for each payment stage, each with its own prepayment invoice, or

(2) manually adjust the prepayment percentage on the original PO after each stage.

For frequent use, a custom extension to handle multiple prepayment schedules on a single PO is the most efficient and accurate solution.

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kimberley5231 61 on at

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Update:

Thank you all for replying. Our current solution is to receive the percentage being invoiced from the vendor, then create a purchase invoice for approval from the engineer. This allows for the percentage to go into Goods Received Not Invoiced and allows for approvals.

We've rejected manipulating the percentages so we can have multiple prepayments as this results in a proration of the initial prepayment across the rest of the prepayments - which is a huge challenge to get the payment to the vendor to the correct amount to match their invoice.

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