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:
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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. |
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