Prepaid Inventory - Fully Prepaid vs Not Fully Prepaid Option

Fully Prepaid is a field found in Create Purchase Orders (PO40). If this flag is ON (i.e. the check box is selected), then it means the full amount of the invoice is known and you agree to pay for the goods in full before receipt of the product or real supplier invoice. You save some posting steps if you use this option.

Below is a comparison of the steps and resulting GL entries if Fully Prepaid is used or not:

	Fully Prepaid = NO	Fully Prepaid = YES
PO40	Enter PO and do not check the Fully Prepaid check box	Enter PO and select the Fully Prepaid check box
AP30	Post Invoice for full amount of the PO; Prepaid Inventory flag = ON CR A/P DR Prepaid Inventory Auto generates a PCR DR A/P CR PPD Inventory Clearing	Post Invoice for full amount of the PO; Prepaid Inventory flag = OFF CR A/P DR Prepaid Inventory (this is not automatic; the operator has to do this)
AP42 or AP50	Pay Prepayment Invoice DR A/P CR Bank	Pay Prepayment Invoice DR A/P CR Bank
PO64	Goods are received; Print Receiving Register DR Inventory CR Receipts Accrual Receipts Accrual files are updated	Goods are received; Print Receiving Register DR Inventory CR Prepaid Inventory (this happens automatically) Receipts accrual files are NOT updated
AP30	Post Real invoice from supplier and apply PCR CR A/P DR Receipts Accrual CR Prepaid Inventory DR PPD Inventory Clearing (these postings happen automatically) Record written to file APIVC which tracks which PCR's are applied to which invoices.	Nothing more needs to happen when the real invoice from the supplier arrives.
AP50	In this scenario, nothing is owed to the supplier but you still need to use the Adjustment option to complete the application of the PCR to the Real Invoice process. This step will write a Payment record in APIHP for the invoice that was paid, will update the Total Paid fields in APIH for the PCR (does not write an APIHP record) and will remove the "PCR Applied to Invoice" record in APIVC.