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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?
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
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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