Process Prepayment in AX 2012

Purchasing agent creates the purchase order and submits a request to AP coordinator to process prepayment:

• Create a new purchase order under Accounts Payable module for vendor 3107, Alpine Electronics. Let us make a note of their balance before we proceed with a prepaid PO processing for them.

• Create purchase order header and PO line for item(1001) for 600 quantity.

• Click the Purchase tab and click Prepay > Prepayment button.
• Enter a suitable description for the prepayment for purchase order and enter the prepayment value. In our case, let us assume that vendor has requested 10% prepayment.
• Enter 10% and verify that the prepayment remaining value which will be 10% of the total PO value. Note that you can also specify a fixed prepayment amount if vendors requests so.

Prepayments can be removed after it has been setup on a PO by clicking the Remove prepayment button. if business later cancels the prepayment.

*Note: The prepayment category ID is the procurement category against which the prepayment will be tracked

• Now, Confirm the purchase order after saving the prepayment details.

Posting the Prepayment Invoice:

• To do this, click the Invoice tab in the purchase order form and click Prepayment invoice button.

• Now enter invoice number and click Post > post button to post the prepayment invoice.

• Note the newly created vendor transaction and also take a note of the affected vendor balance. Recording of the prepayment invoice increases the vendor balance. In this scenario it is $4100.25(Vendor balance before prepayment invoice) + $87,720(Prepayment invoice amount).

AP Coordinator/Manager processes the required prepayment:

• It’s now AP Manager’s task to make the payment for the prepayment which was requested for the purchase order.
• Navigate to AP > Journals > create a new payment journal.
• Click payment journal line and click Functions > Settlement button and select the prepayment invoice.

• Print the check for vendor and post the payment. Make a note of the vendor transactions and the affected vendor balance also after this step. Vendor balance decreases after the payment has been made.

Settle the payment against the final invoice:

• When the goods arrive and you receive the final invoice from vendor, settle the prepayment with it.
• Navigate to Purchase order screen > Invoice tab and generate an invoice.
• Click Apply prepayment button.

• You will notice the prepayment record appearing here in this form. The “Select prepayments to apply” grid displays all the prepayments which could exist for the PO.
• Also notice the invoice amount is $877200 and available application amount is $87,720 which is 10% of the invoice which was paid as a prepayment to the vendor.

• Finally Select the prepayment and click Apply prepayment button. You will see that the “’Total amount of the prepayment that will be applied to the invoice will be 87720.$.
• Make a note that one line gets added in the vendor invoice line.

• Now, Post the purchase order invoice by clicking Post.
• With the PO invoice posted, let us now analyze the financial voucher and the impact on vendor balance.