When you enter a prepayment, you can specify the document number, purchase order number, or sales order number to which the prepayment applies. Accounts Payable will use this number to match the posted prepayment to the invoice when it is posted.
Note: It is not necessary to supply a matching document number when you enter a prepayment.
You can also add a prepayment at the same time as you enter an invoice. For more information, see A/P Invoice Entry Screen.
If Accounts Payable cannot match the invoice to the prepayment when the invoice is posted, you use an Apply Document transaction type to match them.
Prepayments have a payment activation date—which is the date on which Accounts Payable considers the payment to be credited to the vendor account. Prepayments are not used to calculate amounts due to vendors when you use the A/P Create Payment Batch screen until their activation dates.
For multicurrency prepayments:
- All checks in a batch are issued in the bank currency.
- You enter the amount of a prepayment in the vendor's currency—even if the vendor's currency is different from the bank currency.
- If the bank or vendor does not use the functional currency, you can use the A/P Rate Override screen to change the exchange rate information for the prepayment, and to see the conversion from the vendor currency to the bank currency. For more information, see A/P Rate Override Screen.
To add a prepayment that you will apply later:
- Accounts Payable > A/P Transactions > Payment Entry.
- In the Batch Number field, enter the batch number for an existing batch, or click the Create New Batch button to create a new batch.
- Click the Create New Entry button and enter a description for the payment in the Entry Description field, such as "Prepayment of PO 5664."
- In the Payment Transaction Type field, select Prepayment to record an advance to a vendor account.
- Fill in the remaining fields on the A/P Payment Entry screen. For more information, see A/P Payment Entry Screen.
- Click Save.
Note: When you click Save, Accounts Payable assigns a prepayment number to the prepayment. The number uses the prefix and next sequence number specified on the Numbering tab of the A/P Options screen.
After adding a prepayment
- Print the Batch Listing. Correct entries, if necessary, then reprint the listing for each corrected batch. Once batches are correct, file the reports.
Note: You must print batch listings before posting if you select the Force Listing Of All Batches option on the Processing tab of the A/P Options screen.
- Print individual checks. For more information, see Printing a Single Check When You Pay a Vendor.
- Select the Ready To Post option for each batch, or select each batch individually from the A/P Payment Batch List screen, then choose Yes when asked whether to choose the Ready To Post option.
- Post the batch. You must also post the prepayment before you can apply it to the vendor's account.
Note: If any payment transactions cannot be posted, Accounts Payable will create a new batch containing the transactions with errors. For more information, see Printing Checks for a Batch of Payments.
- Apply the prepayment to the vendor's account.