A client came to me with a procurement scenario that they were facing. They needed to order goods from an overseas manufacturer, but this manufacturer required a prepayment before they would build the order. Normally this isn’t a big deal if you are familiar with prepayments in Dynamics 365.
The twist on this scenario is that this client also needed to create a voyage for these goods as they would take possession of the goods as soon as these items were delivered to the port. They needed to create a voyage for these goods. The question was would a prepayment on the purchase order work with a landed cost voyage.
Prepayments with Purchase Orders
The out of the box process for generating prepayments on a purchase order is fairly straightforward.
- Create the purchase order as you normally would.
- Click the Prepayment button on the purchase tab of the purchase order. You then decide the amount of the prepayment. You can decide to use a fixed amount or percentage. You will also be required to pick the category.
- After creating the prepayment, the next step is to go to the Invoice tab of the purchase order and generate the prepayment invoice. You will want to specify the required information on the invoice and post it.
- Once the prepayment invoice is posted, the next step would be to go to the payment journal and issue a payment for the prepayment invoice.
After the goods are received and you are generating the vendor invoice you can then choose to apply the prepayment to the invoice.
If you forget to apply the prepayment to the invoice you can do this step later by going to the vendor and clicking on the invoice tab. Under the invoice tab there is an option to apply prepayment.
Prepayments and Voyages
Luckily for us (and my client) prepayments work on voyages in the same way that they work on purchase orders.
The flow is basically the same.
- Create the PO and add a prepayment as you normally would.
- Create the voyage as you normally would.
- When you create the voyage invoice you have the same option to apply the prepayment to the invoice.
And that’s it!
Conclusion
Prepayments are required in many business scenarios often where a company is dealing with a vendor that is new to them or someone that they do not order from normally.
I wasn’t 100% sure to begin with if the prepayment process would work with a voyage because the voyage seems to a fairly different process. I was pleasantly surprised though when it did in fact work.
