This diagram illustrates the supplier prepayment process flow when you're issuing a prepayment against a purchase order.

• Purchase Order, if you're issuing the prepayment against a PO
• See Supplier Invoices and Supplier Payments prerequisites

Go to the Supplier Invoices page, and click New. The image below shows the steps to create a prepayment invoice and issue it against a purchase order.

1. Select Prepayment as the invoice type.
2. Enter the purchase order. Kenandy does the following:
   • Automatically populates the Remit To Supplier, Payment Method, and Currency from the PO. The Payment Method defaults from the supplier, and you can change it.
   • Creates invoice lines matched to all PO lines available for invoicing in the Invoice Lines section.

   Notes:

   • You can’t issue a prepayment invoice against more than one purchase order. Therefore, the Match to PO process doesn’t apply for this flow.
   • If you’re not issuing the prepayment against a PO, select a remit to supplier and enter the invoice lines manually. You add the item, quantity, and unit price for each line.
   • If you're issuing a partial payment against the PO, you can edit the value in the Quantity field.
3. Enter the invoice number and invoice amount, and select the invoice date.
4. Click Save. Kenandy generates an internal ID for the invoice.

The next step is to validate the invoice for approval. The image below shows the validated invoice with a status of Approved. It’s now eligible for payment. Continue to Pay the Prepayment.

Go to the Create Supplier Payments page to pay the approved prepayment invoice. The image below illustrates the selected prepayment before you create the payment.

1. Refine the payment rules and invoice selection options to display the prepayment in the Invoices to Pay section, and make sure the prepayment is selected.
2. If you selected Batch Job as the Create Payments option, click Create Payments. If you selected Immediately, click Preview Payments to open the Payment Preview and review the payment, then click Create Payments.

This image shows the payment preview.

This image shows the payment confirmation.

Go to the Supplier Invoices page, and click New. The image below shows the steps to create a standard invoice and match it to the prepaid purchase order.

1. Keep Invoice selected as the invoice type.
2. Enter the purchase order. Kenandy does the following:
   • Automatically populates the Remit To Supplier, Payment Method, and Currency from the PO. The Payment Method defaults from the supplier, and you can change it.
   • Creates invoice lines matched to all PO lines available for invoicing in the Invoice Lines section.
3. Enter the invoice number and invoice amount, and select the invoice date.
4. Click Save. Kenandy creates the invoice.

Note: If you’re not matching the invoice to a PO, select a remit to supplier and enter the invoice lines manually. You add the item, quantity, and unit price for each line.

The next step is to validate the invoice for approval. Once validation is successful, you can apply the prepayment to the invoice. Continue to Apply the Prepayment to the Standard Invoice.

Go to the Create Supplier Payments page to apply the prepayment to the standard invoice. You create a zero dollar payment to net out the prepayment invoice "credit" with the actual invoice.

The image below illustrates the selected prepayment before you preview and create the payment.

1. Select the Create Zero Amount Payments checkbox. This ensures the prepayment will apply to the invoice net to zero. This is also useful if you send remittance advice information to your supplier that shows how you’ve applied the prepayment.
2. After you filter your invoices to pay, make sure the prepayment invoice and the standard invoice are both listed and selected in the Invoices to Pay section. A paid prepayment will have a zero amount in the Balance Due field, and a negative amount in the Credit Memo Balance field. The credit memo balance reflects how much of the paid prepayment is available to be applied and deducted from a payment.
3. Click Create Payments to create the payment. If you set Immediately instead of Batch Job for the Create Payments option, you click Preview Payments first, then create the payments.

This image shows the payment preview.

This image shows the payment confirmation.

Accounting for supplier prepayments differs based on these scenarios:

• When you create the supplier prepayment
• When you pay the supplier prepayment
• When you apply the supplier prepayment to an invoice

Kenandy provides an Accounting Workbook that illustrates the supplier prepayment scenarios. The workbook shows examples of the expected accounting and the generated accounting.

Generate Accounting for Supplier Prepayments

To account for prepayments, run the accounting batches for both supplier invoices and supplier payments. You can also run accounting manually on an ad hoc basis.