RE: Prepayment of purchase invoices
TFF,
Prepayment processing off the Purchase Order will allow you to meet the requirements. The process is as follows:
1. Create a Purchase Order
2. Determine what % or Amount you will prepay for the Vendor and set that value on the Fast Tab, prepayment. This will insert a prepayment amount value on all the Purchase Lines noting that all Items on the PO are being prepaid.
3. Post the Prepayment Invoice, creating the Payable against the Vendor and pay the Vendor. When you generate a Prepayment Invoice the Status = Prepayment Pending, then after you pay the Vendor it will change to Released
4. When the goods arrive you will Post Receive and then when the final Invoice arrive you will Post Invoice. During Post-Invoice, the Prepayment is reversed and applied to the Posted Purchase Invoice. Any remaining amount will appear as Open on the Vendor and AP Aging.
From an accountants point of view, here are the entries:
Prepayment Post Invoice - Debit - Vendor Deposit (Prepaid) GL Account / Credit - AP
Pay the Prepayment Invoice - Debit - AP / Credit - Bank Account
Post Invoice related to PO - Debit - Inventory / Credit - Prepaid Account ( This occurs in 2 entries but I am summarizing)
Hope this helps.
Thanks,
Steve
