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How to Set Up Vendor Prepayments

Posted by Sara Duong, Consultant on Sep 13, 2022 9:21:44 AM
Sara Duong, Consultant
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What are Vendor Prepayments? When Vendor requests a deposit or payment before a Purchase Order is approved or before a Vendor Bill is issued, you can record this payment as a Vendor Prepayment in NetSuite.  


This is a native function in NetSuite but needs to be enabled. Here are some features of the Vendor Prepayment function:  

  • Able to automatically apply prepayments to Vendor Bills.  If a prepayment is associated with a Purchase Order, then you can configure the prepayments to automatically apply to Vendor Bills related to the Purchase Order.
      • If prepayment is not associated with Purchase Order, then User will need to manually apply prepayment to the Vendor Bill.  
  • Works with Multi-Book Accounting. Prepayments can be shared across all accounting books. 

How to set up Vendor Prepayments in NetSuite 

Here are the steps needed to configure the feature:  

  1. Enable Vendor Prepayments 
      1. Go to Setup > Company > Setup Tasks > Enable Features. 
      2. Click the Accounting subtab. 
      3. Under the Basic Features section, verify that the A/P box is checked. 
      4. Under the Advanced Features section, check the Vendor Prepayments box. 
      5. Click Save
  2. Configure Default Vendor Prepayment Account. This can be done at the Company level and at the Subsidiary level.  
      1. At Company level: 
          1. Go to Setup > Accounting > Preferences > Accounting Preferences. 
          2. Under the Accounts Payable section, select an account from the Vendor Prepayment Account dropdown list. 
      2. At Subsidiary level: 
          1. Go to Setup > Company > Classifications > Subsidiaries. 
          2. Click Edit next to a subsidiary. 
          3. Under the Preferences subtab, click the General subtab. 
          4. Select an account for this subsidiary from the Vendor Prepayment Account dropdown list. 
  3. Permissions for Vendor Prepayments.  Go to the role and make sure these permissions are set.  
      1. Go to Setup > Users/Roles > User Management > Manage Roles. 
      2. Locate the role you want to modify, and click Edit or Customize.
      3. On the Permissions subtab, click Transactions
      4. In the Permission dropdown list, select the corresponding permission: 
          1. Vendor Prepayment – To authorize the user or role to work with vendor prepayment transactions. 
          2. Select Vendor Prepayment Application – To authorize the user or role to work with vendor prepayment applications. 
      5. In the Level dropdown list, select the required access level. 
      6. Click Add to add the new permission, or click OK to modify the existing permission. 
      7. Click Save
  4. Configure Vendor Prepayment with Auto – Apply 
      1. Go to Setup > Accounting > Preferences > Accounting Preferences 
      2. Under the Accounts Payable section, configure the Auto-Apply Vendor Prepayments setting: 
          1. Check the Auto-Apply Vendor Payments box to automatically apply your vendor prepayments. 
          2. Clear the Auto-Apply Vendor Prepayments box if you wan to apply your prepayments manually

How to Create Vendor Prepayments 

Here are the steps to create a Vendor Prepayment:  

  1. Go to Vendor Dashboard > Transactions > Enter Vendor Prepayment (Administrator). 
  2. Complete the Vendor Prepayment form as described in the section below. 
      1. See SuiteAnswers 87416 for explanation of fields. 
  3. When all the required fields are complete, click Save


Please contact Concentrus if you are interested in setting up Vendor Prepayments.  We are happy to assist you in configuration or training.  



About Us


Concentrus is a complete NetSuite solutions provider that guides organizations through how to use NetSuite to reach highly focused business goals and objectives. We provide NetSuite implementation, developer, integration, and customization services to ensure that you have a long-term solution that is tailored to fit your systems, people, and processes.


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Tags: NetSuite, NetSuite How To's, Accounting, NetSuite Tips, Financial, Transactions, Vendor, Vendor Payments, Bills, Bill Payment

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