Prepayment Invoices

A prepayment is a type of invoice you enter to make an advance payment to a supplier or employee. For example, you need to pay a deposit on a lease, or pay an employee an advance for travel expenses. You can later apply the prepayment to one or more invoices or expense reports you receive from the supplier or employee to offset the amount paid to them. The supplier might send an invoice that references a prepayment. The supplier has reduced the invoice amount by the amount of the prepayment and associated tax. You can use the Prepayment on Invoice feature to enter the invoice. See: Entering Invoices that Reference Prepayments.
You can enter two types of prepayments: Temporary and Permanent. Temporary prepayments can be applied to invoices or expense reports you receive. For example, you use a Temporary prepayment to pay a hotel a catering deposit. When the hotel's invoice arrives, apply the prepayment to the invoice to reduce the invoice amount you pay. Permanent prepayments cannot be applied to invoices. For example, you use a Permanent prepayment to pay a lease deposit for which you do not expect to be invoiced.
In the Invoice Workbench you can enter and apply prepayments. In the Invoice Gateway you cannot enter prepayments, but you can apply existing prepayments to invoices you enter.
You enter a prepayment as you enter any other invoice. However, you additionally specify 1) the prepayment type, Temporary or Permanent, and 2) the settlement date, the date after which the prepayment can be applied to an invoice. You can apply a hold to a prepayment if you want to control payment of it. You can also enter an invoice amount that includes a prepayment.
On a prepayment, you can enter any number of distributions, either manually, or automatically by purchase order matching, distribution sets, or allocating. You can enter all types of distributions, including Tax distributions created by automatic tax calculation and automatic withholding tax. You can also take discounts on prepayments.
You can apply paid Temporary prepayments on and after the prepayment settlement date. You can apply only Item distributions from the prepayment. The prepayment remains available until you apply the full amount of the prepayment Item distributions to one or more invoices. You can review the Prepayment Status Report to check the status of all prepayments in Payables. See: Prepayments Status Report.
When you enter a Standard invoice in the Invoice Workbench, or enter an expense report in the Expense Reports window, Payables notifies you if you have available prepayments for the same supplier.
You apply prepayments to invoices and expense reports differently, depending on where you enter them: Invoice Workbench, Invoice Gateway, Expense Reports window, or Oracle Internet Expenses. See the window-specific documentation for details.
When you apply a prepayment, Payables creates a negative amount Prepayment type distribution on the invoice, and reduces the prepayment's available applicable amount. For example, if you apply a $100 Prepayment distribution to an invoice, Payables creates a negative $100 Prepayment distribution, and reduces the Amount Available on the prepayment Item distribution by $100. The account of the Prepayment distribution on the invoice defaults from the Item distribution on the prepayment.
When you apply a prepayment, in addition to updating fields in the Apply/Unapply Prepayments window, Payables updates the following fields. For Invoice Gateway invoices and expense reports, these values appear after import:
For the invoice:
i) Invoices window: Prepaid Amount; Status is updated to reflect that the invoice has been paid or partially paid
ii) Distributions window: Prepayment Number; Prepayment Distribution
For the prepayment:
i) Invoices window: If you have applied all Item distributions, the invoice Status will change from Available to Fully Applied
ii) Distributions window: Prepay Amt Remaining