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Prepayments for Purchase Orders: Calculation of the Prepayment Amount

In some cases, you need to prepay a percent of the cost of a purchase order before the vendor produces, ships, or delivers the goods to your company. While you are working with the purchase order on the Purchase Orders (PO301000) form, you can click Create Prepayment Request on the More menu. The system opens the Bills and Adjustments (AP301000) form with a new prepayment request linked to the purchase order, with the lines of the purchase order copied to the Details tab and the prepayment amount inserted in each prepayment request line.

To simplify the creation of prepayment requests for purchase orders, you can define a standard percentage of the prepayment amount for the applicable records (those that correspond to a particular requirement for a prepayment); these default percentages can be used in the appropriate situations for calculating the prepayment amount in prepayment request lines. You can specify a default prepayment percent for the following records:

  • A particular purchase order: On the Vendor Info tab of the Purchase Orders form, specify this percent in the Prepayment Percent box.
  • A stock item purchased by a specific vendor: On the Vendors tab of the Stock Items (IN202500) form, in a row with this vendor selected, specify this percent in the Prepayment Percent column.
  • A non-stock item purchased by a specific vendor: On the Vendors tab of the Non-Stock Items (IN202000) form, in a row with this vendor selected, specify this percent in the Prepayment Percent column.
  • A particular vendor: Specify this percent in the Prepayment Percent box on the Payment tab of the Vendors (AP303000) form.
For each line of the prepayment request, the system calculates the value in the Prepayment Amount column by using the value in the Prepayment Percent column. The system checks related system settings in the following order and uses the first source value it finds:
  1. If a default prepayment percent is specified in the settings of a purchase order for which the prepayment request is prepared, the system inserts this percentage for the line (regardless of the applicable vendor and item settings).
  2. If a default prepayment percent is specified in the settings of the stock item or non-stock item selected in the line, the system inserts this percentage for this line (regardless of the applicable vendor settings).
  3. If a default prepayment percent is specified for the vendor selected for this prepayment, the system inserts this percentage for this line.
If a default prepayment percent is not specified for any of these system settings, the system inserts 100 as the default value, which indicates that the full amount of the purchase order line should be inserted in the related line of a prepayment request.

You can manually override the default prepayment percent that the system has inserted into any line to change the prepayment amount on the Bills and Adjustments form; also, you can delete any of the lines copied from the original purchase order to exclude them from prepayment.