August 10th, 2012 by Mohamed Aamer

 

One of the objectives to have an ERP (Enterprise Resource Planning) application in the company to control its resources especially in organization expenditures Vendor’s prepayment is a normal practice in daily business where some vendors request a prepayment (amount/percentage) before shipping the goods or services.  MS Dynamics AX 2012 covers this business needs by offering Vendor Prepayment Function, this function was not covered in the previous versions of MS Dynamics AX, vendor prepayment function gives company’s controller ability to minimize the risk of duties segregation between company departments, control prepayment process where accounts payable do not perform prepayment transaction without assigned prepayment linked to Purchase Order, and harmonize business process between procurement and accounts payable.

Vendor Prepayment cycle executed among procurement agent, accounts payable, and bank accountant:-

MS Dynamics AX 2012 Vendor Prepayment Process

 

 

 

 

 

 

 

 

 

 

 

1-      Procurement agent creates a purchase order

2-      Procurement agent assigns prepayment to Purchase Order as per the agreement with the vendor whether prepayment is fixed amount, or percentage from the total purchases of the PO.

3-       Procurement agent confirms the Purchase Order

4-      The vendor issue a prepayment invoice

5-      Accounts payable post prepayment invoice, the prepayment invoice amount is inherited from the previous prepayment assignment.

6-       Bank accountant have open invoice need to be paid and settled against payment

7-      After warehouse keeper receives the goods in the warehouse, the vendor sends final invoice

8-      The accounts payable accountant apply the prepayment to the final invoice, and post the PO invoice. If the AP accountant does not apply the prepayment invoice to the PO invoice, he/she could apply it later on

9-       Bank accountant have open invoice with vendor residual balance need to be paid and settled against payment

User group: DynamicsArabia

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