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We have numerous POs not fully received that have prepayments attached to them. Our support team recommended receiving and invoicing for the amount the PO was short. This clears the PO. Then create a credit memo for the shortage to adjust inventory to the correct amount.
The issue is when the CM is created, the adjustment goes to AP inventory rather than splitting between the inventory deposit account (Prepayment related to the PO shortage amount) and AP inventory. Is there a way to create a CM and dictate the balancing accounts with the correct amounts?Entries.xlsx
Maybe i don't fully understand your issure here. But i think the best way would be to adjust the quantity to match the recieved quantity before your post the PO. That way you would not have any discrapency between the quantity invoiced and the quantity recived.
Just to add more to this, if we were not dealing with Prepayments, we could change the Quantity to equal the Quantity Received, and then delete the Purchase Order...however with Prepayments, we don't like changing Quantity on the PO line after a Prepayment invoice is posted. That creates sort of a "moving target" for what the prepayment line should be, and we actually lock that down and don't allow you to reduce the quantity. You will receive an error.
You have a couple different options though, and you may need to play around in a test copy of the database, or Cronus to see what works best for you.
1. At this point, your Vendor Prepayment GL Account should actually already be netted to $0 after posting the remaining invoice. So I'm not sure if you are really wanting to do this, perhaps so... I'm not an accountant so sometimes I don't fully understand :-) If you do indeed want that Vendor Prepayment account updated when posting the Purchase Credit memo (so that it has a remaining balance), you will actually need to manually add a G/L Account Line on the Credit Memo. To make this a bit easier, I would suggest after creating the Purchase Credit Memo Header, use the function up in the Ribbon called 'Get Posted Document Lines to Reverse'. Look for the Posted Invoice that you invoiced for the shorted amount. You should see 2 lines, one for the item and the other for the Vendor Prepayment GL Account that was also posted. We don't pull GL Lines here, as this is more of an Inventory item function...but you can at least see what was posted for the vendor prepayment account and use that as a template.
So for example, say our Purchase order is for 10 qty at $10 each... so we have a $100 Invoice, and with a 25% prepayment. If you first received/invoiced 6 of 10 qty ($60) after the prepayment invoice ($25) was posted, and the 4 remaining Qty. is what you will no longer be receiving, but received/invoiced it fully in order to remove the Purchase Order, then you would see 2 lines within the 'Get Posted Document Lines to Reverse'..... 1 line for the item ($40) and the other for the Vendor Prepayment account for -$10, which is the amount reversed (credited) during the posting of the 4 qty remaining. You can use that to know what to manually add to the line. Again, please test this scenario in a Test company to verify your results.
Otherwise, if you just post the credit memo for the 4 qty of the item, it'll just treat it as a normal Purchase Credit Memo and will not touch your Vendor prepayment Account.
2. The other alternative I would suggest though, is instead of receiving/Invoicing the remaining qty on the Purchase Line, to go up in the Purchase Order header and find the Prepayment Posting section and choose 'Post Prepayment Credit memo'. In that case, it would credit my Prepayment Vendor Account the $10 and AP debit $10. You could then change the Quantity on the Purchase Line to 6 qty (must Reopen Purchase Order) and then delete the Purchase Order. This would seem the more simple approach.
I hope that helps.
Thanks for your insight. Prepayments create an entirely new set of challenges. I'll test your suggestions and use the one that best fits our needs. Thanks again for your help!
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