Application of Bill to Vendor Prepayment transaction to nullify open balance

Scenario:

A Purchase Order was created and a vendor prepayment transaction was made. Later, the vendor prepayment was no longer valid as neither the Item receipt nor the refund was possible. The period is closed and the purchase order is in closed status. The vendor prepayment transaction is in paid status. It can’t be voided as no cash refund is happening. A Journal entry was passed but it does not show in the apply tab of the Vendor Prepayment page.
The open balance in the Vendor prepayment account register needs to be nullified.

Comments:

The Vendor Prepayment currently cannot be applied to a Journal entry in NetSuite. This is an enhancement currently in the voting stage [629203 – Vendor Prepayment > Ability to Apply Vendor Prepayments to Journal Entries]. Hence when Journal entries are passed for vendor prepayment, under current NetSuite standard provisions it will not reflect in the applied to tab in the Vendor Prepayment records.

Suggestions:

One roundabout workthrough is to apply the Vendor Prepayment to a bill.

• Navigate to the Bill creation page and select the Vendor.
• Under the Expenses subtab of the Expenses and Items tab, select an account.

When selecting an account in the expense tab of the bill, please see the below options:

1. Select Vendor Prepayment account if the corresponding bill amount is to be reflected in the Vendor Prepayment register. [If the Vendor prepayment account is to be nullified and the corresponding amount is to be recorded elsewhere, do not select the vendor prepayment account as the account in the bill]
   [Please note that Vendor Prepayments account will only be reflected in the account list if the ‘Expand Account lists’ feature is enabled in Accounting Preferences. This is because the Vendor Prepayment account is not an expense account.]
2. Select an expense account if the corresponding bill amount is to be shown as an expense.
3. If the amount is to be shown as a loss in a particular account, then select that account as the account in the bill.

• Enter the Prepayment amount and Save the Bill.
• Navigate to the Vendor Prepayment page and click Apply.
• The Bill created will be displayed. Select the bill and click Save to create the Vendor Prepayment application.

Result:

By following this solution, the open balance in the Prepayment account will be nullified by the corresponding vendor Prepayment application amount. The corresponding amount would reflect in the account entered in Bill. The Bill would be shown in the Apply tab in the Vendor Prepayment record. The bill will be in Paid in Full status.