--- title: "Pre-paying a Supplier before Receipt of Goods" canonical: "https://kb.myframeworks.com.au/space/PROSTIXV48DOC/31099498/Pre-paying%20a%20Supplier%20before%20Receipt%20of%20Goods" format: markdown --- This procedure explains how to pay suppliers for purchase orders before receiving stock. The normal process for paying for goods involves the receipt of goods and the receipt of an invoice which is then approved, selected for payment and paid, however some Suppliers from time to time request a prepayment of either the full amount or part of the purchase value before they release their goods for delivery. To make this payment requires the entry of a prepayment transaction into the Supplier account so that a payment can be drawn and sent to the Supplier. Pre-Requisites: This process requires a new control account 'Prepaid Purchases' to be defined for the branch requiring a prepayment can be made. This account needs to be created as a balance sheet account and loaded against the branch in Branch Maintenance. If this account is not defined, an error message 'Pre-Paid Purchases G/L Account not found for branch 1' appears when trying to create the prepayment transaction. To pay suppliers for purchase orders before receiving stock , perform the following: 1. Create your purchase order if this has not already been created. Refer to process Purchasing - Standard Products in the Purchasing and Receipting User Guide for further information. 2 . From the Prostix Main Menu select 'Accounts Payable' then 'Transaction Processing' then 'Invoice Entry' . 3. If applicable, s elect the appropriate Company from the available options. 4. Select to create a new batch, then type in the details of the invoice, (the invoice number is irrelevant as this is automatically changed later in the process) including the order number of the purchase order that requires payment. For the amount, make sure that you type at least the amount that the Supplier wants you to pre-pay, then select . 5. Select the type of 'Pre-Paid Stock Invoice' , from t he 'Invoice Type' selection box. The following message appears: Invoice number changed to a pre-paid invoice'. Select . The invoice number changes to a 'PP' number. Select for the GST amount. The following message appears: This invoice has been allocated to the branch Pre-paid Purchases account'. Select to continue. 6. If there are no further invoices to process then select to complete and post the batch. The Creditors Control Account is credited, and the branch Pre-Paid Purchase Orders and GST Purchases accounts are debited. 7. The prepayment transaction is now on the Supplier account as a payable invoice to be ' Selected ' and ' Paid ' as per any other invoice. 8. After the goods are receipted and the real invoice for the goods arrives, process the invoice via ProStix Main Menu option ' Purchasing & Receipting ' then ' Creditors Invoice Approval '. Refer to process Creditors Invoice Approval in the Purchasing & Receipting User Guide for further information. After you select to allocate the invoice to the G/L account, a message appears 'Reversing Pre-Paid Invoices $', Where $ is the dollar amount of the pre-payment. Select then . 9. If you have finished adding invoices, then complete and post the batch via 'Purchasing & Receipting'. Select 'Creditor's Invoice Approval' then if applicable, select the 'Company'. Enter the Batch Number on the field provided, then select or . 10. The initial prepayment transaction/s created in steps 5 and 6 are reversed off the Supplier account, leaving the account with the amount of the prepayment made, and the invoice processed in step 7 (with the prepayment transaction now flagged as a payable invoice on the Supplier Account), leaving any residual balance still to be paid.