Vendor Prepayment

Vendor Prepayment

The Vendor Prepayment feature records and tracks deposit amount paid to vendors prior to the acceptance of a purchase order by the vendor. We can apply these prepayment amounts against open bills for the vendor. We can apply the prepayment manually or we can configure NetSuite to apply the prepayment automatically.

1. Enabling Vendor Prepayment Feature

Vendor Prepayment feature can be enabled by

1. Go to Setup > Company > Setup Tasks > Enable Features.
2. Click the Accounting subtab.
3. Under the Basic Features section, verify that the A/P box is checked.
4. Under the Advanced Features section, check the Vendor Prepayments box.
5. Click Save.

2. Configuring Vendor Prepayment Account 

We need to choose a vendor prepayment account under accounting preferences to work with vendor prepayments. This can be a new or existing account that is an Other Current Asset type. This is the account that NetSuite selects by default when entering a new vendor prepayment transaction. We can configure the account at the subsidiary level or company level.

To configure the default vendor prepayment account at the company level:

1. Go to Setup > Accounting > Preferences > Accounting Preferences.
2. Under the Accounts Payable section, select an account from the Vendor Prepayment Account dropdown list.

To configure the default vendor prepayment account at the subsidiary level:

1. Go to Setup > Company > Classifications > Subsidiaries.
2. Click Edit next to a subsidiary.
3. Under the Preferences subtab, click the General subtab.
4. Select an account for this subsidiary from the Vendor Prepayment Account dropdown list.

3.Configuring Vendor Prepayments with Auto-Apply

The Auto-Apply accounting preference is enabled by default, affecting all the prepayments transactions that meet the Auto-Apply conditions. If we want to apply the prepayments always manually, we must disable the Auto-Apply preference.

To configure vendor prepayments with Auto-Apply:

1. Go to Setup > Accounting > Preferences > Accounting Preferences
2. Under the Accounts Payable section, configure the Auto-Apply Vendor Prepayments setting:
   1. Check the Auto-Apply Vendor Payments box to automatically apply vendor prepayments.
   1. Clear the Auto-Apply Vendor Prepayments box if we want to apply prepayments manually.

4.Entering Vendor Prepayments

To enter vendor prepayments:

1. Go to Transactions > Payables > Enter Vendor Prepayment.

• Complete the Vendor Prepayment form as described in the section below.
• When all the required fields are complete, click Save
• In the Payee field, select the payee from the dropdown list.
• The Prepayment Account field auto fills with the default prepayment account for the payee, and it cannot be changed from this page. It shows the default vendor payment account added at company level or subsidiary level.
• The Currency field auto fills with the default currency for the vendor.
• The Exchange Rate depends on the currency selected for the payee, and cannot be changed. If the currency of the Payee is different from base currency, the Exchange Rate field shows the corresponding exchange rate value. 
• Select the Purchase Order associated with this vendor prepayment, if we have one for the vendor. The Purchase Order dropdown menu shows the document number of purchase orders in one of the following statuses:
  • Pending Receipt
  • Pending Bill
  • Partially Received
  • Pending Billing / Partially Received
• Select the Account.
  • We can select a bank account or credit card for this payment. The bank account currency must be the same as the transaction currency.
  • The Check # field auto fills with the value of the document number. When using a bank account, the Check # field auto fills with the next consecutive number generated for the account, and we can optionally change this number. When choosing a credit card, the Check # field is empty and we cannot change the value.
• The Balance field shows the balance of the currently selected account.
• Enter the Payment Amount for this prepayment. When we select a Purchase Order, the Payment Amount auto fills with the total purchase order amount. We can edit the Payment Amount.
• To modify the Date, enter or pick a different date. The default value corresponds to the current date.
• To modify the Posting Period, select a different posting period from the dropdown menu. The default value corresponds to the current posting period.
• Check the appropriate box:
  • To Be Printed – adds a check for this vendor prepayment to the print queue.
  • Voucher – adds a voucher for this vendor prepayment to the print queue.
• In the Approval Status field, select the approval status of this transaction.
  • Pending Approval – the transaction is awaiting approval
  • Approved – the transaction is approved
  • Rejected – the transaction is denied
• In the Next Approver field, you can select an employee with the authority to approve or reject this transaction.

5.Deleting a Vendor Prepayment Transaction

When we delete a vendor prepayment, NetSuite does the following:

• Removes the transaction from the list of vendor prepayments.
• Restores the account balance in the vendor prepayment account.
• Removes the transaction from the Recent Records subtab.
• Registers the delete action in the Audit Trail.

When we delete a vendor prepayment application, NetSuite does the following:

• Removes the transaction from the list of vendor prepayment applications.
• Restores the account balance in the Accounts Payable account, and deletes the posting impact from the general ledger.
• Removes the transaction from the Recent Records subtab.
• Registers the delete action in the Audit Trail

To delete a vendor prepayment transaction:

1. Go to Transactions > Payables > Enter Vendor Prepayment > List.
2. For the transaction you want to delete, click Edit.
3. On the transaction detail, point to Actions and then select Delete.
4. Click OK to confirm your action.

6.Disabling the Vendor Prepayments Feature

To disable the Vendor Prepayments feature, we must first delete all vendor prepayment transactions.

To disable the Vendor Prepayments feature:

1. Go to Setup > Company > Setup Tasks > Enable Features.
2. On the Accounting subtab, clear the Vendor Prepayments box under the Advanced Features section.
3. Click Save.