Bills (Prepayment) Journal Entry

Question

Hello Everyone,As standard of Acumatica, when we click the create prepayment on the purchase order screen. It navigates you to bills and adjusment screen and upon releasing of bills and adjustment with prepayment type. it can’t produced a journal entry and then upon posting of checks and payment it gives you an entry ofDr. Advances   Cr. Cash in Bank.but my clients requirements is to have an entry upon posting of bills and adjustment with prepayment type like.Dr. Advances  Cr. Accounts Payable Is it possible to set up? or any recommendation or work around?Thank you.

YasasWithanage76 · Accepted Answer

Hello @FieIt's not possible the generate an accounting entry when we release a prepayment request in the Bills and Adjustments screen (standard functionality)If the user needs to create a prepayment on the purchase order screen, they must need to follow the Standard way (please keep in mind user cannot use the Simplified way to prepayment in the PO screen). That means they need to create a prepayment request (non-posting document) in the Bills and Adjustments screen then they need to create a check (posting document) to pay this prepayment request. In that stage initially accounting entry will create. After that user needs to apply this prepayment against the bill. Then Application accounting entry will create.In the Bills and Adjustments screen, we are creating prepayment request only (it’s not 100% prepayment). It’s only an internal accounts payable document that denotes the vendor’s request for prepayment in the system. The main purpose of this document is to financial control (this document can be approved if required in your system).When it comes to the accounting entries,Prepayment request (Bills and Adjustments (AP301000)) – not creating any entryPrepayment from prepayment request (Checks and Payments (AP302000)) – it will record the given advance payment (it’s a company asset)Advance account/ Deposit to Vendor account  DR Bank/cash account  CRPrepayment application against the bill (Checks and Payments (AP302000))Accounts Payable Account  DR Advance account/ Deposit to Vendor account CRRelated Acumatica Help documentationhttps://help-2021r2.acumatica.com/(W(4))/Help?ScreenId=ShowWiki&pageid=4a4d967f-52ec-40c1-ac86-ecd522dd2b7a

Laura02 · Answer

Hello,I think the standard entry produced by Acumatica is correct because it decreases cash and records the payment to the vendor in a proper account.When a Prepayment is sent, cash is reduced. When a Prepayment is sent and cash is reduced, we want the balance in cash on our GL to match to the bank when the Bank Reconciliation Statement is performed.I don’t think you want a Credit to Accounts Payable because a credit INCREASES accounts payable, increasing the amount owed to your vendor. When you send a prepayment to a vendor, the amount owed to the vendor in the future is decreased.

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