How to create Prepayment Invoice in Oracle Cloud ERP

Prepayment in other words called Paying in Advance. In Oracle Cloud ERP why we make advance payment to supplier it is called Prepayment .Let us discuss how to create Prepayment Invoice in Oracle Cloud ERP and accounts payable module. Oracle Fusion Accounts payable offering has provided complete functionality to record supplier advance with prepayment Invoice .Also once supplier send the original Invoice ,we can apply the prepayment to the standard Invoice

We will see the complete flow of accounting entries generates in Oracle fusion for prepayment and its application.

Please check all our video blog here and subscribe to our YouTube channel

Steps to Create Prepayment Invoice in Oracle Cloud ERP

Create Prepayment .

Validate the Prepayment

Create Accounting for the Prepayment Invoice

Make Full payment for Prepayment Invoice

Create Accounting for the Prepayment Payment

Now create a standard Invoice for the same supplier and site

Validate the Standard Invoice

Create Accounting for the Standard Invoice and check accounting entry

Now apply the available Prepayment to the standard Invoice

Now submit create accounting again for prepayment application and check accounting entry

If any outstanding amount left ,pay this with normal check payment or EFT Payment.

Create Accounting and check accounting entry

To watch the complete video on Prepayment click here

How the Status changes in Oracle Cloud ERP

Notice here how the prepayment Invoice and standard Invoice status changes after each step

Create Prepayment
After Prepament created	status	Never Validated
After validation	status	Unpaid
After payment	status	Available
After Application	status	Fully Applied

Standard Invoice
Create Invoice	status	Need validation
After validation	status	Validated
Apply Prepayment Application	status	Need revalidation

Accounting entries in Oracle Cloud ERP for Prepayment

	Accounitng flow
Prepayment creation	Prepayment Account Dr	Dr	2000
	Liability Account	Cr		2000

Prepayent Payment	Liability Account	Dr	2000
	Cash /Cash Clearing	Cr		2000


Standard invoice Creation	Item Expenses Accout	Dr	3000
	Liability	Cr		3000

Prepayment Application	Item Expenses Account	Dr	3000
	Liability			1000
	Prepayment			2000

Outstanding Invoice payment	Liability	Dr	1000
	Cash /Cash Clearing	Cr		1000