You can record prepayments in Manual Check and Payment Entry as zero-balance invoices, which can be applied when the actual invoice is recorded. To retain the payment record in Accounts Payable, you must enter an invoice number the prepayment is recorded against. The invoice amount must be the full payment amount being recorded.
You can distribute the invoice against a prepaid expense account or directly to known expense accounts. Prepaid expense accounts can be established for different types of expenses (for example, prepaid rent or prepaid utilities). You can also expense the payment amount directly to the appropriate expense accounts if you know in advance which accounts they are. If expense distribution tables are set up in Expense Distribution Table Maintenance, you can select a table and apply the prepayment using the predefined accounts and distribution percentages. Do not record payments as prepayments for accounts that can be posted in advance of expected expenses.
Before You Begin
To record a prepayment
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Select Accounts Payable Main menu > Manual Check and Payment Entry.
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Enter the bank code and check number. For more information, see Manual Check and Payment Entry - Fields.
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In the Check Date and Check Amount fields, enter the date and amount of the prepayment.
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In the Vendor No. field, enter the vendor receiving the prepayment.
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Click the Lines tab. In the Invoice No. field, enter an invoice number that can identify the prepayment. You can enter PP followed by the payment date in YYMMDD format (for example, PP100531).
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In the Invoice Amt field, enter the amount of the prepayment.
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In the General Ledger Distribution window, enter the G/L Account and Amount fields to distribute the prepayment amount. For more information, see General Ledger Distribution - Fields.
If the prepayment is a deposit for an asset purchase, enter the deposit account in the G/L Account field. Do not apply prepayment amounts for assets to the asset account until the invoice is received.
Click Accept.
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In Manual Check and Payment Entry, click Accept.
The prepayment is recorded. Print and update the Manual Check and Payment Register.
Example - A General Ledger Posting for a $1000 Prepayment
A typical general ledger posting for a $1000 prepayment being applied for rent follows.
If a prepaid expense account is used:
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Prepaid Expense
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1,000.00
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|
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Cash Account
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_______
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1,000.00
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|
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1,000.00
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1,000.00
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If a direct expense account is used:
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Expense Account
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1,000.00
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|
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Cash Account
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_______
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1,000.00
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|
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1,000.00
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1,000.00
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To record a prepayment using an expense distribution table
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Select Accounts Payable Main menu > Manual Check and Payment Entry.
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Enter the bank code and check number. For more information, see Manual Check and Payment Entry - Fields.
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In the Check Date and Check Amount fields, enter the date and amount of the prepayment.
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In the Vendor No. field, enter the vendor receiving the prepayment.
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Click the Lines tab. In the Invoice No. field, enter an invoice number that can identify the prepayment. You can enter PP followed by the payment date in YYMMDD format (for example, PP100531).
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In the Invoice Amt. field, enter the amount of the prepayment.
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In the Exp Dist Table field, enter a table code.
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After entering all information for the line, move to the next line.
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In the General Ledger Distribution window, verify that the information is correct and make changes if needed. For more information, see General Ledger Distribution - Fields. Click Accept.
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In Manual Check and Payment Entry, click Accept.
The prepayment is recorded. Print and update the Manual Check and Payment Register.
