How to Set Up and Enter Vendor Payments

To work with vendor prepayments, we must enable the feature first.

The Accounts Payable feature is a prerequisite to work with vendor prepayments. We should verify this feature is enabled before enabling Vendor Prepayments.

To enable the Vendor Prepayments feature:

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.

Note: This feature (Vendor Prepayments) is not currently enabled in our account.

After Vendor Prepayments feature is enabled, we must configure a default vendor prepayment account. This can be a new or existing account that is an Other Current Asset type. This is the account that NetSuite system selects by default when entering a new vendor prepayment transaction.

 We can configure the vendor prepayment account at the company level. If we use NetSuite OneWorld, we can configure the account at each subsidiary level. By default, subsidiaries in NetSuite OneWorld use the account settings at the company level, but we can configure a different prepayment account for a subsidiary.

 

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.

We start providing deposits to our vendor by entering a new vendor prepayment. When the prepayment is complete, the status of the transaction is paid. The bank or credit card account is credited, while the prepayment account is debited.

 After entering a vendor prepayment, we can immediately apply the prepayment amount to bills from the same vendor, or we can complete the application later.

Configuring Permissions for Vendor Prepayments

When you enable the Vendor Prepayments feature, the system creates two new permissions:

• Vendor Prepayment – Grants the user or role permissions to work with vendor prepayment transactions.
• Vendor Prepayment Application – Grants the user or role permissions to work with the vendor prepayments applications.

The following table lists the required permission levels for working with vendor prepayment transactions:

Permission Level	Permissions
VIEW	View only
CREATE	ViewEnter new transactions
EDIT	ViewEnter new transactionsEdit existing transactions
FULL	ViewEnter new transactionsEdit existing transactionsDelete transactions

To configure permissions for vendor prepayments:

1. Go to Setup > User / Roles > User Management > Manage Roles.
2. Locate the role we want to modify and click Edit or Customize.
3. On the Permissions subtab, click Transactions.
4. In the Permission dropdown list, select the corresponding permission:
   1. Vendor Prepayment – To authorize the user or role to work with vendor prepayment transactions.
   1. Select Vendor Prepayment Application – To authorize the user or role to work with vendor prepayment applications.
5. In the Level dropdown list, select the required access level.
6. Click Add to add the new permission or click OK to modify the existing permission.
7. Click Save.

To enter vendor prepayments:

1. Go to Vendor Dashboard > Transactions > Enter Vendor Prepayment.
2. Complete the Vendor Prepayment form as described in the section below.
3. When all the required fields are complete, click Save.

Apply Vendor Payments to Open Bills

After we make a prepayment to a vendor, we must apply the prepayment against our vendor bills. Applying a vendor prepayment posts in the general ledger. The Prepayment account is credited, offsetting the Accounts Payable account. The application decreases the total amount we must pay to our vendor.

Applying Vendor Prepayments Manually

When applying a vendor prepayment against multiple bills manually, we can choose how the prepayment amount is allocated to each bill. The Bills subtab in the Vendor Prepayment Application page shows the bills available for application.

When applying a vendor prepayment against one or more bills, consider the following information:

• We can apply the full prepaid amount in a single application, or complete multiple applications using the same vendor prepayment.
• We can apply one prepayment to a single bill or to multiple bills, up to the total prepayment amount.
• When selecting bills for application, NetSuite autofills the Payment amount using the following criteria:
  • Applies the total bill amount if the bill amount due is less than the unapplied prepayment amount.
  • Applies the total prepayment amount if the bill amount due is more than the unapplied prepayment amount.
  • Excludes other bills for application when we apply the total prepayment amount.
• Alternatively, we can complete the application using the Auto Apply button in the Bills subtab. Auto Apply applies the prepayment amount on bills up to the total prepayment amount.

The Summary box in the Vendor Prepayment Application page shows the applied and unapplied prepayment amounts as you select bills during the application.

To apply vendor prepayments manually:

1. In the Vendor Prepayment screen, click the Apply button.
2. If we are not in the Vendor Prepayment screen:
   1. Go to Transactions > Payables > Enter Vendor Prepayment > List.
   1. Click the View link next to the prepayment transaction we want to apply for.
   1. Click the Apply button.

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 our vendor prepayments.
   1. clear the Auto-Apply Vendor Prepayments box if we want to apply your prepayments manually.