Prepaying a Vendor

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 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 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:

1. Open Accounts Payable > A/P Transactions > Payment Entry.
2. In the Batch Number field, enter the batch number for an existing batch, or click the New button to create a new batch.
3. Click the New button beside the Entry Number field, and in the field to the right, enter a description for the payment, such as "Prepayment of PO 5664."
4. In the Transaction Type field, select Prepayment to record an advance to a vendor account.
5. Fill in the remaining fields on the Payment Entry screen. For more information, see A/P Payment Entry Screen.

6. If the prepayment is job‑related :

   1. Select the Job Related option.
   2. Click Jobs.

      The Project and Job Costing Apply Details screen appears.

   3. Distribute amounts to the contracts, projects, categories, and resources for which you are making payment. For more information, see A/P Project and Job Costing Apply Details Screen.
7. Click Add or Save.

   Note: When you click Add, 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.

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