Vendor prepayment

This article describes how to use the vendor prepayment functionality in Dynamics AX 2012.

The creation of a prepayment from the purchase order is done in 4 steps:

  • Step 1: Setup the prepayment,
  • Step 2: Create the prepayment invoice,
  • Step 3: Payment journal,
  • Step 4: Link the prepayment in the final vendor invoice.

1/ Prerequisites

To use the prepayemnt functionality, you need to setup a specific vendor posting profile (generaly the prepayment general account is different to the vendor account).

Access: Accounts payable > Setup > Vendor posting profiles

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In the AP parameters, setup this new posting profile for the prepayment transactions, and select your option for the sales tax.

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2/ Purchase order

Access: AP > Common > Purchase orders > All purchase order.

The first step is to create the purchase order:

  • Click on New to create a new purchase order
  • Select the vendor account

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  • Select the item and the quantity
  • Enter all informaiton you need

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  • And confirm the purchase order

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3/ Setup the prepayment

You must set up the prepayment that will be associated with the purchase order:

  • Go to the tab “Purchase”
  • And click on “Prepayment”
  • Choose between fixed amount or a percent amount. Exemple: you need to pay $100  (select fixed) or you need to pay 30% of the invoice (select percent).
  • Click on Save

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4/ Prepayment invoice

The next step is to post the prepayment invoice:

  • Go to the tab “Invoice”.
  • And click on “Prepayment invoice”.
  • The field Prepayment must be selected.
  • Enter the invoice number and the invoice date.
  • The amount is automatically field with the prepayment setup option (previous step).
  • Post the invoice.

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5/ Payment journal

Access: AP > Journals > Payments > Payment journals

You must create a payment journal to pay the prepayment to the vendor:

  • Create a new journal,
  • And go to the lines form.
  • Enter the vendor number in the field “Account”
  • Click on Functions > Settlement

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  • Mark the prepayment line.
  • Payments informations will be transfered automatically to the journal lines.

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  • Enter the offset account (Bank account)
  • Check in the payment tab that the posting profile is the one for prepayment.
  • Select (if needed) the Method of payment
  • When the status is correct (depends of the setup of the method of payment), post the journal.

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6/ Final vendor invoice

Access: AP > Common > Purchase orders > All purchase order.

The final step of the prepayment process is to settle the payment against the final invoice. Go to the purchase order form.

  • Open the purchase order
  • Receive the product : click on “Product receipt”, enter the receipt number and validate.
  • The purchase order status must be “Received”

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  • Click on “Invoice” button (tab invoice)

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  • Click on “Apply prepayment” to link the prepayment with the invoice
  • Select the prepayment to apply.

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  • A new line is created in the invoice
  • Enter the invoice number and date.
  • Post the invoice.

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The final step will be to pay the vendor invoice. We can check the amount to pay in the Settle transcation form (AP > Common > Vendors > All vendors): Amount to pay = 295,68 (Invoice with sales tax 394, 68 – prepayment 99).

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One thought on “Vendor prepayment

  1. Pingback: Vendor prepayment journal | My Financial Dynamics AX

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