Purchasing agent creates the purchase order and submits a request to AP coordinator to process prepayment:
Create a new purchase order under Accounts Payable module for vendor 3107, Alpine Electronics. Let us make a note of their balance before we proceed with a prepaid PO processing for them.
Create purchase order header and PO line for item(1001) for 600 quantity.
Click the Purchase tab and click Prepay > Prepayment button.
Enter a suitable description for the prepayment for purchase order and enter the prepayment value. In our case, let us assume that vendor has requested 10% prepayment.
Enter 10% and verify that the prepayment remaining value which will be 10% of the total PO value. Note that you can also specify a fixed prepayment amount if vendors requests so.
Prepayments can be removed after it has been setup on a PO by clicking the Remove prepayment button. if business later cancels the prepayment.
*Note: The prepayment category ID is the procurement category against which the prepayment will be tracked
Now, Confirm the purchase order after saving the prepayment details.
Posting the Prepayment Invoice:
To do this, click the Invoice tab in the purchase order form and click Prepayment invoice button.
Now enter invoice number and click Post > post button to post the prepayment invoice.
Note the newly created vendor transaction and also take a note of the affected vendor balance. Recording of the prepayment invoice increases the vendor balance. In this scenario it is $4100.25(Vendor balance before prepayment invoice) + $87,720(Prepayment invoice amount).
AP Coordinator/Manager processes the required prepayment:
It’s now AP Manager’s task to make the payment for the prepayment which was requested for the purchase order.
Navigate to AP > Journals > create a new payment journal.
Click payment journal line and click Functions > Settlement button and select the prepayment invoice.
Print the check for vendor and post the payment. Make a note of the vendor transactions and the affected vendor balance also after this step. Vendor balance decreases after the payment has been made.
Settle the payment against the final invoice:
When the goods arrive and you receive the final invoice from vendor, settle the prepayment with it.
Navigate to Purchase order screen > Invoice tab and generate an invoice.
Click Apply prepayment button.
You will notice the prepayment record appearing here in this form. The “Select prepayments to apply” grid displays all the prepayments which could exist for the PO.
Also notice the invoice amount is $877200 and available application amount is $87,720 which is 10% of the invoice which was paid as a prepayment to the vendor.
Finally Select the prepayment and click Apply prepayment button. You will see that the “’Total amount of the prepayment that will be applied to the invoice will be 87720.$.
Make a note that one line gets added in the vendor invoice line.
Now, Post the purchase order invoice by clicking Post.
With the PO invoice posted, let us now analyze the financial voucher and the impact on vendor balance.
Once you have the Vendor add justification workflow defined, users are able to request new vendors through the Employee Self Service Portal and then submit them for approval.
How to do it…
To submit new vendor requests through the Employee Self Service Portal and then submit them for approval, follow these steps:
New Vendor Requests are initiated from the Employee Self Service Portal by clicking on theVendor requests link within the Order Products group.
When the Vendor requests form is displayed, click on the Vendor request button within theNew group of the Requests ribbon bar.
When the New vendor request dialog box is displayed, fill in the Vendor Name, and also theFirst name and Last name of the main contact that you have for the new vendor.
Note: In this example we also checked the No online capabilities box to simplify the process. At the end of this walkthrough we will show what additional steps are enabled when this checkbox remains unchecked.
After you have filled in the basic information, click on the Create button to create your new vendor request.
This will now take you to a more detailed form where you can start filling out more information about the vendor. Start off by opening up the Vendor address details tab, and clicking on theAdd button to add a new address for the requested vendor.
Update the address details for the vendor request and then click on the Save and close button to return to the maintenance form.
Then open up the Vendor contact details and add any relevant contact information like e-mails and phone numbers.
If you have personal contact information for the contact person, then open up the Contact person contact details tab, click on the Add button and add that information as well.
We need to add at least one entry in the Procurement details category list.
And finally open up the Business justification tab and fill in any of the information that the Purchasing department have configured as a justification checklist.
When you are done entering in all of the shell information for the vendor request, click on theSave and close button to update the information.
Once you have saved the data, then you will be able to see a Submit button in the workflow toolbar. To start the approval process, just click the Submit button.
If you have any comments that you want to attach to the submission then you can add them in the Comments dialog box, and then click the Submit button.
Now you will be able to see your new vendor request, and also see the status of the request which should be Request submitted.