๐To Process a Prepayment Order or Transaction, try to Follow these Steps:
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(1) Post the Purchase Prepayment Invoice, then...
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(2) Post Advance Payment (Receipt), and...
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(3) Apply this Posted Payment Entry on the Current Purchase Order, after that Post Regular Purchase Receipts or Invoices (following the standard and old way).
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โก๏ธHint: Purchase Prepayment Account is treating like, Prepaid Expense, this is covered under the Current Assets (group) in the Balance Sheet (i.e., Financial Statement of every Company).
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๐Agenda of the Video: If our Vendor/Supplier/Service Provider require to Receive Payment before they'll Ship the Order, we can use the Purchase Prepayment process.
โซ๏ธIf you require, your Customers, to Pay before you'll Ship their Order to them, you can use the Sales Prepayment process.
We can start the Prepayment process, when we create a Purchase or Sales Order.
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โซ๏ธThe Default Prepayment %tage for an item on the Order, or for the Vendor or Customer, will be included in the Prepayment Invoice.
We can also specify a Prepayment %tage to the Entire Document, enabling the "Compress Prepayment" (option).
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โซ๏ธAfter we create a Purchase or Sales Order, we can create a Prepayment Invoice for it.
Either use the Default %tage for each Purchase or Sales Line, or Adjust the Amount.
For Example, we specify a Total Amount for the Entire Order.
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๐Note: We'll share the "Prepayment" Purchase Order and Invoice "Setup" Part in the upcoming Video
