Vendor Prepayment with Solution

By - February 9, 2024


Clients often have a requirement where they need to pay vendors a pre-payment on a shipment per the established payment arrangements. Usually in these scenarios one would create a Vendor Prepayment record in NetSuite and apply it to the Bill when it is created. However, if the client is utilizing, this is not an option as does not support the Vendor Prepayment record or any other type of prepayment option.


In order to work within the requirements of for Vendor Prepayments, we have identified the following solution. This process will allow the client to record and pay prepayments out of that will reduce the overall payment of the bill once it is created.

PO Creation

When the Purchase Order is created, it is necessary to also record the prepayments as the last lines on the purchase order. The item to be used is a Non-Inventory Item for Purchase that is linked to an Advances Paid – Other Current Asset Account.

The user will need to add 2 lines for the prepayment – one is a positive (debit) amount that will record the prepayment. The other is a negative (credit) amount that will reduce the amount of the final bill when entered in

Once the PO is created, it will sync to with all the lines present.

Prepayment in 

Once the Purchase Order is synced to, the user will access and create a Bill to represent the Vendor Prepayment. Then proceed to enter in the Bill information and link it to the Purchase order created in NetSuite. All the lines from the Purchase Order will appear on the Bill. The user must remove all the lines except for the positive PO Prepayment line.

Once the Bill is approved, the Bill will sync to NetSuite recording the prepayment with a Debit to the Advances Paid account and a Credit to the Accounts Payable.

Post Purchase Order Receipt – Final Bill in

Once the Purchase Order is received and the final Bill is entered into, you will link it to the Purchase Order and all the purchased items will appear including the PO Prepayment credit amount. Creating the Bill for all these items will result in the accurate amount left to be paid. This Bill will sync to NetSuite recording the appropriate GL Impact.

If there is a requirement to have multiple prepayments, the user would simply add more positive (debit)/negative (credit) lines at the bottom of the Purchase Order to correspond to the required prepayment amounts and process in the same manner.

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