How to post prepayment to Vendors for inventory-related PO (without connection to SO) ?

Hi Janna Nikolov,

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To record a prepayment to a vendor for an inventory-related Purchase Order (PO) in Dynamics 365 Finance and Operations (or a comparable ERP system) without linking to a Sales Order (SO), use the following procedure:

1. Initiate a Purchase Order (PO)
   • Access: Procurement and Sourcing > Purchase Orders > All Purchase Orders.
   • Select: New to create a new purchase order.
   • Choose Vendor: Pick the vendor for whom the prepayment will be issued.
   • Input PO Information: Provide necessary details for inventory items, including item number, quantity, unit price, and delivery schedule.
2. Configure Prepayment Terms
   • Navigate to: The Prepayments section within the Purchase Order form.
   • Click: Add to set up prepayment terms.
   • Specify Prepayment Type: Choose between a Percentage or Fixed Amount for the prepayment.
   • Enter Prepayment Details: Define the prepayment amount or percentage as applicable to the total purchase order value.
3. Initiate a Purchase Order (PO)
   • Access: Procurement and Sourcing > Purchase Orders > All Purchase Orders.
   • Select: New to create a new purchase order.
   • Choose Vendor: Pick the vendor for whom the prepayment will be issued.
   • Input PO Information: Provide necessary details for inventory items, including item number, quantity, unit price, and delivery schedule.
4. Configure Prepayment Terms
   • Navigate to: The Prepayments section within the Purchase Order form.
   • Click: Add to set up prepayment terms.
   • Specify Prepayment Type: Choose between a Percentage or Fixed Amount for the prepayment.
   • Enter Prepayment Details: Define the prepayment amount or percentage as applicable to the total purchase order value.
5. Generate and Record the Prepayment Invoice
   • Go to: Procurement and Sourcing > Purchase Orders > All Purchase Orders.
   • Locate: The relevant purchase order.
   • Open: The PO and move to the Invoice tab.
   • Select: Invoice > Invoice > Prepayment Invoice.
   • Fill Out: The prepayment invoice details and ensure accuracy.
   • Post: Confirm and post the invoice to update the system with the prepayment entry.
6. Confirm and Reconcile the Prepayment
   • Navigate to: Accounts Payable > Vendor Payments > Payment Journal.
   • Verify: Ensure the prepayment has been accurately recorded in the vendor’s account.
   • Reconcile: Check that the prepayment amount is properly reflected and reconciled in the accounts payable ledger.

Note: By following these steps, you can accurately record and manage a prepayment to a vendor for an inventory-related purchase order, ensuring that it is handled correctly without involving a sales order.

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