Prepayment Invoices

A prepayment is a type of invoice you enter to make an advance payment to a supplier or employee. You can enter two types of prepayments: Temporary and Permanent.

Temporary prepayments can be applied to invoices or expense reports you receive. For example, you use a Temporary prepayment to pay a hotel a catering deposit. When the hotel's invoice arrives, apply the prepayment to the invoice to reduce the invoice amount you pay.

Permanent prepayments cannot be applied to invoices. For example, you use a Permanent prepayment to pay a lease deposit for which you do not expect to be invoiced.


Include Prepayment in Invoice:
You can enter supplier invoices where the invoice amount includes prepayments. If you receive a supplier invoice, and the invoice amount has been reduced because of prepayments that the supplier has received, you need to indicate that the invoice amount includes one or more prepayments.

Example:
Prepay Invoice:    200$
Standard Invoice: 500$

Case 1: If you apply Prepay on Standard invoice with 'Apply' check box checked in Apply/Unapply window

Result on Standard Invoice after apply Prepay
Header
   Invoice Amount: 500$
   Paid Amount :    200$
Distributions
   Item                 500$
   Prepay             -200$
In this case distribution total is 500 not 300 and amount paid is 200, remaining amount to pay is 300.

Case 2: If you apply Prepay on Standard invoice with both check boxes selected in Apply/Unapply window

Result on Standard Invoice  after apply Prepay
Header
   Invoice Amount:  300$
   Paid Amount :        0$
Distributions
   Item                  500$
   Prepay              -200$    'Prepayment on Invoice'-Checked
In this case distribution total is 300 because prepay is part of Std invoice. Amount to pay is 300.
Note: Because the Distribution Total includes prepayments, you need to ensure that you have applied prepayments before you submit the invoice for Invoice Validation.


Points To Note:

1. Settlement date: The date after which the prepayment can be applied to an invoice.
2. On a prepayment, you can enter any number of distributions, either manually, or automatically by purchase order matching, distribution sets, or allocating. 
3. You can take discounts on prepayments.
4. You can create Foreign Currency Prepayments.
5. You cannot partially pay a prepayment. you must fully pay it.
6. You can apply prepay on the invoice type is Standard, Mixed, or Expense Report.
7. You can apply only Item distributions from the prepayment.
8. You must fully pay a prepayment before you can apply the prepayment to an invoice.
9. If you want to apply Permanent type prepay then you can change the Prepayment Type to Temporary.
10. Supplier, invoice currency and payment currency must be same on prepay and to invoice.
11. If the prepayment has a value in the Prepayment PO Number field, then the invoice must be matched to the same purchase order.
12. GL Date on Apply/Unapply window, which is the accounting date for the new Prepayment distributions that Payables creates when you apply a prepayment. This date must be after the latest accounting date on any distribution for either prepayment or invoice and must be in an open period.