Vendor Prepayments

Overview

The Vendor Prepayment feature in GoldFinch is used to manage advance payments (deposits) made to a vendor before goods or services are received. Prepayments are typically calculated as a percentage of the total Purchase Order amount and are represented using a GoldFinch Payment Term record assigned to a Vendor Account.

Setting Up the Vendor Prepayment Feature

To set up the Vendor Prepayment feature, follow these steps:

Create a Vendor Prepayment GL Account:

1. Open the App Launcher and search for GL Accounts.

2. Click on New to create a new GL Account with the following values:

   • Account No.: 1400-Vendor Prepayment Account

   • Type: Balance Sheet

   • Sub Type 1: Assets

3. Click Save.

Create a Payment Term with a Default Prepayment %:

• Open the App Launcher and search for Payment Terms.

• Click on New to create a new Payment Term with the following values:

  • Payment Term Name: Prepayment zz%, where zz is the prepayment percentage.

  • Prepayment %: zz, where zz is the prepayment percentage.

  • Due Date Calculation: 0

  • Discount Date Calculation: 0

  • Discount %: 0

  • Description: Prepayment

  • Bypass AR: Unchecked.

• Click Save.

Assign the Prepayment Payment Term to a Vendor Account:

1. Open the App Launcher and search for Accounts.

2. Select the Vendor Account to assign the Prepayment Payment Term.

3. Edit the Payment Term field and enter the prepayment term that was previously created.

4. Click Save.

Create a Vendor Prepayment Service Item:

• Open the App Launcher and search for Items.

• Click New to create a new Item with the following values:

  • Item No.: Z-Vendor Prepayment Item

  • Base Unit of Measure: EA

  • Item Type: Service

  • Description: Vendor Prepayment Item

• Click Save.

Set Up Account Posting for Vendor Prepayment:

1. On the newly created Z-Vendor Prepayment Item, go to the Account Posting Setups related list and click on New.

2. Populate the following values:

   • Account Purchase: Select the Vendor Prepayment GL Account (zzzz-Vendor Prepayment).

   • Account Purchase Return: Select the Vendor Prepayment GL Account (zzzz-Vendor Prepayment).

   • Company Setup: Select your company’s setup record.

   • Item: Z-Vendor Prepayment Item (this should already be populated).

3. Click Save.

Assign the Vendor Prepayment Item to the Company Setup:

• Open the App Launcher and search for Company Setup.

• Select your company’s Company Setup record.

• Assign the Z-Vendor Prepayment Item to the Vendor Prepayment Item field.

• Click Save.

Using the Vendor Prepayment Feature

Create a Purchase Order with Prepayment Terms:

• When creating a Purchase Order for a vendor, the prepayment terms set on the Vendor Account will automatically be applied to the order.

• You can modify the Prepayment % directly on the Purchase Order if needed.

• After entering all Purchase Lines, click Create Prepayment Invoice to generate a Prepayment Purchase Invoice.

Create a Prepayment Purchase Invoice:

• The Prepayment Purchase Invoice is a standard Purchase Invoice with the Vendor Prepayment Service Item added as a line item.

• The prepayment amount is calculated as Order Cost × Prepayment %.

• Multiple Prepayment Purchase Invoices can be created, but the total prepayment amount cannot exceed the total Purchase Order cost.

• Click Post to post the Prepayment Purchase Invoice.

• Posting the Prepayment:

  • Once the Prepayment Purchase Invoice is posted, the Vendor Prepayment GL Account will be debited.

  • The Vendor Invoice can now be paid, and the payment can be applied against the Prepayment Purchase Invoice.

Receiving Goods and Finalizing the Purchase:

• After receiving goods or services, create and post a Warehouse Receipt.

• Create the final Purchase Invoice, and GoldFinch will automatically subtract the total prepayment amount from the Purchase Invoice.

• Once the invoice is posted, the Vendor Prepayment GL Account will be credited.

This feature helps businesses manage vendor deposits efficiently and ensures that prepayments are tracked and applied correctly when final invoices are processed.