Overview of Prepayments in Receivables
Use Prepayments in Receivables to manage advance payments that you receive from your customers.
You may receive advance payments, for example: against expenses related to a project contract; full or partial payment against a sales order; a mandatory advance payment for goods and/or services to be delivered on a specified date.
In addition, in some countries the tax authorities require companies to issue a taxable prepayment invoice before or with any advance payment.
You can create and apply both manual and imported prepayment invoices:
- Use the Create and Edit Transaction pages, and the Manage Transactions page, to manually create and apply prepayment invoices against sales invoices.
- Use the Receivables Invoices REST API to create prepayment invoices and sales invoices with prepayment application lines using the POST operation of receivablesInvoices REST APIs.
- Use the AutoInvoiceImportTemplate and the Import AutoInvoice process to create imported prepayment invoices and apply them to sales invoices.
When a prepayment invoice is applied to a sales invoice, the outstanding balance of the sales invoice is either reduced or settled by the applied amount. The original accounting and tax entries of the prepayment invoice are reversed.
- Create Prepayment Receivables Activities
- Create Prepayment Transaction Types
- Create Prepayment Transaction Sources (imported prepayment invoices)
You create and apply prepayment transactions against the applicable primary ledger and all business units assigned to this primary ledger. You can only process prepayment transactions in the ledger currency.
You can enable document sequencing on prepayment invoices and credit memos using the Sequencing section of the Specify Options page of the primary ledger.
All prepayment accounting activity is maintained in a separate Prepayment account assigned to the Prepayment Receivables activity for a business unit. Prepayment accounting doesn't affect your Revenue account.