Prerequisites

To process prepayments, set up a default prepaid expense account and give users the authority to prepay vouchers. You set up a default prepaid expense account in the Accounting Entry Template page. The account that you enter here automatically changes to the Account field on the distribution line for prepaid vouchers.

Note: Because prepayments are created immediately, the open liability should never be overstated. For this reason, the liability account is the accounts payable account.

You give users the authority to prepay vouchers on the Voucher Styles page. Select the Allow Prepay Voucher check box to give the user the authority to enter a prepayment voucher. Once you select the check box, the Prepay Limit field (in the Online Voucher Processing group box on the User Preferences - Procurement: Payables page) becomes available for entry, and you can specify a maximum amount for each prepayment the user can enter. You must also specify a currency and rate type for this amount.

Note: If you do not enter an amount, the user may enter a prepayment for any amount.