The ability to create purchase order prepayments was introduced w/ GP 2013R2. With any new feature, there is almost always rooms for improvement and POP prepayments is no exception. One of the areas of improvement is such a cluster that we felt a blog describing the issue and the necessary workaround was warranted.
When a PO prepayment has a remaining balance and the corresponding Purchase Order is moved to history, it becomes nearly impossible to apply the prepayment to any future vouchers.
When closing a Purchase Order under Purchasing>>Transactions>>Edit Purchase Orders, the following screen appears which prompts you that there is an unapplied balance on a prepayment.
At this time, we are still able to apply the prepayment balance to any offsetting invoice or debit memo without issue.
However, once the Remove Completed Purchase Orders routine is run (Purchasing>>Routines>>Removed Competed POs), the PO is moved to history and the prepayment is NO LONGER available to select and apply to existing vouchers. It cannot be transferred to regular payables, there cannot be any transactions entered against the PO since it is now historical, it is not available under Apply Payables Documents, & cannot be applied to future check runs.
Quite the conundrum...
Although the balance cannot be transferred to regular payables, we do still have the ability to transfer the balance to A/R using customer/vendor relationships. After transferring to A/R, we can turn around and transfer it back to A/P where it will now become a regular PM voucher (Credit Memo) that can be applied to existing invoices or debit memos for the vendor. We covered the process to transfer balances between customers and vendors in an earlier video here.
All is well up until the point that the Remove Completed Purchase Orders routine is run. During that process, there are no warnings that you'll no longer be able to apply invoices & nothing that stops you from proceeding to create the scenario that we've highlighted above. Here's to hoping that the developers at Microsoft prevents Purchase Orders from moving to history if there is an outstanding balance on a prepayment OR they provide a more direct route to move a POP prepayment to regular payables.
Until then, this will assist you in clearing up those A/P trial balances and remaining documents come month/year-end!