Supplier/Vendor Prepayments

A supplier prepayment is an advance payment made by your organization to a supplier, before the goods or services are received. Prepayment Vouchers are created in the Voucher Processing window to record prepaid expenses against a selected Prepaid Expense GL Account. The Voucher can then be used to pay a supplier in a Payment Processing batch.

Once the goods or services have been delivered and a Supplier/Vendor Invoice has been received, the prepayment will be applied against the Vendor Invoice voucher. The prepayment will be reversed from the Prepaid Expense account and recorded against the relevant GL account assigned on the Vendor Invoice voucher.

This article includes:

• Add a Prepayment Voucher
• Process a Prepayment
• Add a Supplier/Vendor Invoice
• Process a Supplier Payment

Add a Prepayment Voucher

1. From the Main Menu, search for and select Voucher Processing. The Voucher Processing page opens.
2. Click Add. The Add Voucher Batch window opens.
3. Enter a Description and Transaction Date.
4. Click OK. The Add Voucher window opens.
5. Add the following information:
   • Type: Select Prepayment.
   • Supplier: Select the supplier to be paid.
   • Invoice: Enter a reference for the prepayment.
   • Invoice Date: Enter the date you received the payment request.
   • Invoice Amount: Enter the prepayment amount.
   • Currency: Enter the currency of the prepayment.
   • Taxes section: Prepayment vouchers are typically not subject to tax. Tax is usually recorded when the actual invoice arrives. If your vouchers are configured to default the Tax you can set the Tax box to blank to remove any calculated taxes.
6. Click Save (). The voucher will be saved and updated with an Error status.
7. In the Voucher Distribution tab, add the assign required GL Account or Main Account distribution.
   • Prepayment vouchers are usually coded to a prepaid expense asset account. You can manually select this account on the line of each item in the Voucher Distribution tab, in the GL Account Name column or Main GL Account column, depending on your GL configuration. 
8. Click OK. The voucher will be saved with an Unposted status and the Edit Voucher window will close.
9. In the Edit Voucher Batch window click Tools and select Post Voucher Batch. The Post Voucher Batch window opens.
10. Click Post.

Process a Prepayment 

The below process creates a Payment Processing batch, updates the supplier's Payable Ledger, and generates a journal entry.

1. From the Main Menu, search for and select Payment Processing. The Payment Processing page opens.
2. Click Add. The Add Payment Processing Batch window opens.
3. Enter the necessary information for your Payment Batch. See Supplier Payments for more information on each field.
4. In the Open or Available for Payment tab, select the check box for the prepayment vouchers created in the Add a Prepayment Voucher process above.
5. Click OK. The new batch will show in the Payment Processing page.
6. Right click on the batch you just created and select Edit. The Edit Payment Processing Batch window will open.
7. Click Tools and select Assign Checks. The check/reference numbers are assigned to the vouchers, journal entries are created and the status of the batch changes to Ready.
8. Click Tools and select one of the follow options:
   • If using an EFT payment method select Export. The AP Export window opens. Proceed to step 9.
   • If using an Auto Check Payment method select Print Check. The Print Checks prompt opens. Proceed to step 12.
9. If you selected Export, enter the following information:
   
   • Execution Date: Enter the date the EFT will be processed in the bank.
   • Format ID: Select the export format for you EFT file.
10. Click OK. A prompt shows asking if you would like to download the export file.
11. Click Yes. The file downloads and the status of the batch changes to Processed. You can skip the rest of the steps in this section.
12. If you selected Prink Check, ensure the correct check stub is inserted in the printer and click Continue. The Report Viewer opens.
13. Click Print. The Checks are printed and the status of the batch changes to Processed.

Add a Supplier Invoice

Once the Supplier (Vendor) invoice is received, a voucher should be created for the invoice and the prepayment/s can be assigned to the voucher.

1. From the Main Menu, search for and select Voucher Processing. The Voucher Processing page opens.
2. Click Add. The Add Voucher Batch window opens.
3. Enter a Description and Transaction Date.
4. Click OK. The Add Voucher window opens.
5. In the Type field select Vendor Invoice and enter the voucher information as per your normal voucher process, with taxes and expenses recognized as needed. The voucher does not need to be for the same amount as the prepayment. For more information about how to add a voucher see Supplier Invoices (Vouchers).
6. Click the Prepayments hyperlink. The Prepayment Vouchers window opens.
7. In the Applied Prepayment Vouchers tab, click Add Prepayment Vouchers. The Select Prepayment Vouchers window opens.
8. Search for and select the prepayment voucher created in the Add a Prepayment Voucher process.
9. Click OK. The prepayment shows in the Applied Prepayment Vouchers tab of the Prepayment Voucher window.
10. In the Prepayment Voucher window, click OK.
11. Complete the voucher details as per your normal voucher process and then click OK. The voucher will be saved with an Unposted status and the Edit Voucher window will close.
12. In the Edit Voucher Batch window click Tools and select Post Voucher Batch. The Post Voucher Batch window opens.
13. Click Post.

Process the Supplier Payment

The below process updates the supplier's Payable Ledger and generates a journal entry.

1. From the Main Menu, search for and select Payment Processing. The Payment Processing page opens.
2. Click Add. The Add Payment Processing Batch window opens.
3. Add the following information:
   • Bank: Select the Bank Account that will be used for the payment batch.
   • Description: Defaults to 'Payment Batch - *User ID*', but can be edited.
   • Payment Method: select Application.
   • Transaction Date: The date to be added to the EFT export or checks.
4. In the Open or Available for Payment tab, select the invoice vouchers created in Add a Supplier Invoice process. Selecting the invoice voucher automatically selects the prepayment voucher.
5. Click OK. The application is applied, the journal entry is created, and the Payment Batch status is updated to Processed.