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“For this session we will go over how to use the prepayment feature in Microsoft Dynamics 365 Business Central. This can apply to purchase orders or sales orders. For this demo, we will go over a prepayment invoice for a purchase order.
To begin, we create a brand-new purchase order. Let’s say you had an item here ‘Office Table’. There are two things that need to be set up before we have a prepayment ready to post. how prepayments work in business central is that we would generate a prepayment invoice and that would have its own number series.
So the first Setup we have to go through is in the General Posting Setup. We’ll see that we have the General Business Posting and the General Product Posting groups here and a certain combination of them will require accounts for them to post into and for a Sales prepayments account, you would fill this in here. For a purchase prepayments account, you would fill that in over here.
After that we need to go to the Purchases and Payables Setup. Here you would specify the number series- the prefix for your posted prepayment invoices. In this field, Posted Prepayment Invoice Number series, you would have to select or create your own code. That will be your number series for your posted prepayment invoice. So this is the second setup required. Once we have those two setups, we can go ahead and create our prepayment purchase invoice.
We see that we have a prepayment column in the line. But if you scroll down, we also have a Prepayment section here at the header level. We have this prepayment column or field that has a zero on it. We’ll have to add more lines to this line level. If you go to the Settings-> Personalize and we add a field. Let’s look for prepayments. So all of these prepayment line fields will be useful to you. Let me go ahead and put them next to this prepayment percentage.
Now that we have these fields in our lines, there are two ways to set up. The prepayment are percentage based. So if we go ahead and apply it at a header level. And let’s say we have a quantity of one and we’ll see that the unit cost here including tax is 544. If you go ahead and apply a 50% prepayment, it’ll say you have modified the percentage, do you want to update the lines. Click Yes. You’ll notice now on this prepayment line amount, including tax, it’ll calculate the 50% of this direct unit of 544 and it’ll fill in this prepayment percentage of 50% and that will apply that to every line. If you want it to do it line by line, we could also change the prepayment percentage here and let’s say 30%, it’ll also change that calculated line. If you don’t want to do it by percentage, you can just do it from here and the prepayment percentage will be calculated for you.
If you wanted to prepay 200 for this, it’ll calculate that percentage as 36.76. For this, let’s go ahead and make it 40. If we are satisfied with this amount that we want to create a prepayment invoice for, we would then go to the Actions -> Posting -> Prepayment -> Post and Print Prepayment Invoice. Before I do that, I have to enter a vendor invoice number. We will do Prepayment Fabrikam. I’ll go ahead and post this as a prepayment invoice.
Now that prepayment invoice is posted for this 217.60. We can go ahead and navigate and search that out. We’ll see that over here as a posted prepayment invoice. Now this can be closed out with a payment from the payment journal or deposit or however you would like to pay this prepayment invoice. This is a different liability in itself.
And now let’s say we do get the real invoice for this one office table we ordered. So we’ll check the lines. And it says here that we have the quantity to receive was 1, Quantity to invoice is 1. So now let’s say we get the invoice, and its Invoice 333444 and then we go to the Posting -> Post-> Receive and Invoice. Now we will post this purchase order as a posted purchase invoice.
If we go to the invoice, we’ll see the amount for the full purchase order minus this to 217.60, which was our prepayment. So, the total liability for this purchase invoice is now this reduced 326.40. This is how you would go about using the prepayment feature.”
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