Create a Prepayment Invoice
In a traditional accounting system, there are many different types of invoices - regular invoices, purchase invoices, accounts receivable invoices, prepayment invoices, and more. As an LMIS system with limited accounting functionality, OpenBoxes only supports two types of invoices: purchase invoices and prepayment invoices. Purchase invoices are the standard invoice - this is the type of invoice you use to make a final payment on any good or service, and to mark that line as paid in the system. But purchase invoices can only be processed after an item has been shipped in the system. For vendors that require prepayment, there needs to be a way to process a payment before the items have been delivered. That is where the prepayment invoice comes in. For purchase orders that require prepayment, users can process a special prepayment invoice that will show the payment made before they were delivered. After the items are delivered, a purchase invoice must be created to reconcile the prepayment against the final receipt (more details in the instructions below).
Indicating prepayment on a purchase order
Prepayment invoices can only be processed against purchase orders that have a payment term that includes prepayment. If you do not see the option to generate a prepayment invoice, edit the payments terms on the PO to reflect the percentage prepayment. If you do not have prepayment terms available, they will need to be added by your administrator using the instructions here.
Create a Prepayment Invoice
To create a prepayment invoice, first open the PO that you need to prepay. Go to Purchasing> List Purchase Orders and open the order by clicking on the order name.
On the order view page, you will see a button for “Generate Prepayment Invoice.”
If you do not see this option, check the payment terms. The payment terms must be prepayment and the PO must be posted for the generate prepayment option to appear. You can also check the invoices tab to see if a prepayment invoice was already generated.
Select “Generate Prepayment Invoice” to automatically generate an invoice based on the PO lines and the prepayment percent in the PO terms:
The invoice will show all lines on the purchase order, with the quantity to invoice and final cost applied based on the prepayment percentage. For 100% prepayment, the invoice will exactly match the PO. For 50% prepayment, the total value for each line will be 50% of the value of the PO, For 25% it will be 25% of the PO value, etc. Ensure that the invoice matches the proforma you received from the vendor, and press post to register the prepayment.
Unlike purchase invoices, lines in a posted prepayment invoice do do not appear as invoiced on the PO. The prepayment is registered, but the lines do not show as invoiced and complete because the items still need to be received and the payment reconciled. See the section below for how to reconcile a prepayment invoice.
Edit or rollback a prepayment invoice
Prepayment invoices cannot be edited because they are generated based on the information in the PO. If after generating an invoice, you notice an error, you will need to delete the invoice and recreate it after editing the PO to reflect the proforma. From the invoice edit page, press save and exit to go to the invoice view page.
From the view page, press delete to delete the invoice:
Once you have deleted the invoice, go back to the PO and edit it, using the instructions for editing POs after posting in Edit a purchase order. Once the PO is correct, press the generate invoice button again to restart the process.
If the invoice is already posted, you must first roll it back and then delete it. On the invoice view page for a posted invoice, you will see a button for “Rollback.” Select that button to move the invoice back to pending status. Once the invoice is pending, you will see the delete button.
If you want to edit an invoice but are not on the invoice edit or view page, you can find the invoice by going to Invoicing>List Invoices or by opening the associated PO and clicking on the “Invoices” tab.
Reconcile a Prepayment Invoice
In order for lines on a prepayment to be officially invoiced, they must be shipped and added to a purchase invoice. This process verifies that we received what we paid for, and addresses any discrepancies.
After the prepayment is completed, the purchase order goes through the normal shipping and receiving process. If at any point an item needs to be changed or cancelled, users can make those changes to the PO. Once all items on the PO are received or cancelled, there will be an option available on the PO view page to generate the final invoice:
The invoice will be generated for the full PO, with the previous prepayment substracted at the bottom:
For a 100% prepayment PO with all items received, the total value of the final invoice will be 0. For a partial prepayment or a PO where changes were made after prepayment, there will be a balance left to pay. Verify that the invoice matches the final proforma and press “Post Invoice” to finalize.
These lines will now be marked as invoiced in the PO and in all open PO reports.