Prepayments (Oracle General Ledger Users' Guide)


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Prepayments

When you enter a prepayment, you can associate it with a purchase order. If you associate a prepayment with a purchase order, you can only apply the prepayment to an invoice that you match to the purchase order. For such prepayments, usually you do not need to encumber the prepayment, as you have already encumbered the purchase order. However, Oracle Payables does not prevent you from encumbering a prepayment in addition to its purchase order.

Suggestion: To avoid encumbering both a prepayment and its purchase order, define a separate prepayment account that you only use for prepayments associated with purchase orders. When you define budgetary control options for a budget organization, specify Automatic Encumbrance option of None for all accounts that use this prepayment account.

You might have a second prepayment account or an account for advances, which you enter directly into Oracle Payables.

Prepayments

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