1 of 23 da1236 prepayments last updated: march-2004 da1236 prepayments

1 of 23

DA1236 Prepayments

Last updated: March-2004

DA1236Prepayments

DA1236Prepayments

DA1236 Prepayments

Last updated: March-2004 2 of 23

Overview

Overview of Prepayments

With your system set up to use Prepayments functionality is provided that enables the VAT element of an advance payment (prepayment) to be recorded in a VAT specific General Ledger control account until the payment is matched and posted

The mechanism for managing this functionality is clear and auditable

Note that to use this functionality your system must also be set up to use European VAT (DA0370)

Overview of Prepayments

With your system set up to use Prepayments functionality is provided that enables the VAT element of an advance payment (prepayment) to be recorded in a VAT specific General Ledger control account until the payment is matched and posted

The mechanism for managing this functionality is clear and auditable

Note that to use this functionality your system must also be set up to use European VAT (DA0370)

DA1236 Prepayments


General SupportingFiles

DA1236 Prepayments


VAT Codes

This option has been modified to allow prepayment control and prepayment revenue/cost posting codes to be defined

This option has been modified to allow prepayment control and prepayment revenue/cost posting codes to be defined

Note that if these posting codes are not defined the VAT code cannot be used for prepayments

Note that if these posting codes are not defined the VAT code cannot be used for prepayments

Only non-revenue posting codes can be entered for the Prepayment control but it must be left blank if a Normal VAT code has been entered

Only non-revenue posting codes can be entered for the Prepayment control but it must be left blank if a Normal VAT code has been entered

The Prepayment account (revenue/cost) posting code must be flagged as a revenue account if the Ledger code is set to R or a non-revenue code if the Ledger code is P – the VAT code defined against the posting codes must also match the current VAT code

The Prepayment account (revenue/cost) posting code must be flagged as a revenue account if the Ledger code is set to R or a non-revenue code if the Ledger code is P – the VAT code defined against the posting codes must also match the current VAT code

DA1236 Prepayments


PrepaymentProcessing

DA1236 Prepayments


Cash – Accounts Receivable

Note that this system is set up to use Multi-currency Receipts (DA0814)

Note that this system is set up to use Multi-currency Receipts (DA0814)

Enter, as before, the Cash batch and batch control information, then the cash item

Enter, as before, the Cash batch and batch control information, then the cash item

This option has been modified to allow unallocated cash to be marked as a prepayment

This option has been modified to allow unallocated cash to be marked as a prepayment

DA1236 Prepayments



Enter the cash item details...Enter the cash item details...

…including any unallocated amount…including any unallocated amount

Then, to mark the Unallocated amount as a prepayment, select F13-Prepayment


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DA1236 Prepayments

Last updated: March-2004


You can now define the Prepayment VAT codeYou can now define the Prepayment VAT code

Note that only VAT codes that are set to Receivable (R) and have prepayment accounts are displayed in the browse for selection (see slide 4)

Note that only VAT codes that are set to Receivable (R) and have prepayment accounts are displayed in the browse for selection (see slide 4)

To view the calculated amounts and posting codes relating to the prepayment, select F8-Refresh – to accept the prepayment amounts, select CR-Confirm


Note that this functionality is NOT available for Accounts Receivable Refunds

Note that this functionality is NOT available for Accounts Receivable Refunds

DA1236 Prepayments



When the batch is posted, 3 prepayment accrual postings are generated in the appropriate General Ledger accounts and the VAT Register updated – the prepayment VAT protocol number is taken from the system key SLLASTVPR

Note that prepayments can only be registered to a normal VAT Register – if the customer has a pending VAT Register, the VAT is updated to the associated normal VAT register instead

The Prepayment Calculations can be viewed on slide 19

Cash postings and journal postings reverse the amounts when the prepayment item is matched and posted – partial matching is allowed

DA1236 Prepayments


Journals – Accounts Receivable

The prepayment cash item can be matched against the invoice using a journal

The prepayment cash item can be matched against the invoice using a journal

Reversing prepayment accrual postings are generated in the appropriate General Ledger accounts and the VAT Register updated when journal is posted

Reversing prepayment accrual postings are generated in the appropriate General Ledger accounts and the VAT Register updated when journal is posted

DA1236 Prepayments


Cash – Accounts Payable

The functionality works in the same way as for Accounts Receivable cash – you enter the Cash batch and batch control information, then the cash item, followed by the cash item details, including any unallocated amount

The functionality works in the same way as for Accounts Receivable cash – you enter the Cash batch and batch control information, then the cash item, followed by the cash item details, including any unallocated amount

This option has also been modified to allow unallocated cash to be marked as a prepayment

This option has also been modified to allow unallocated cash to be marked as a prepayment



DA1236 Prepayments



You can now define the Prepayment VAT codeYou can now define the Prepayment VAT codeNote that this time only VAT codes that are set to Payable (P) and have prepayment accounts are displayed in the browse for selection (see slide 4)

Note that this time only VAT codes that are set to Payable (P) and have prepayment accounts are displayed in the browse for selection (see slide 4)



DA1236 Prepayments



When the batch is posted, 3 prepayment accrual postings are generated in the appropriate General Ledger accounts and the VAT Register updated – the prepayment VAT protocol number is taken from the system key PLLASTVPR

Note that prepayments can only be registered to a normal VAT Register – if the supplier has a pending VAT Register, the VAT is updated to the associated normal VAT register instead

The Prepayment Calculations can be viewed on slide 19

Cash postings and journal postings reverse the amounts when the prepayment item is matched and posted – partial matching is allowed

DA1236 Prepayments


Transactions enquiry – Accounts Receivable

The third toggle screen (second toggle screen in Accounts Payable Transaction enquiry) of transaction details includes a prepayment indicator – posted items that have a corresponding prepayment record display a ‘P’ in this field

The third toggle screen (second toggle screen in Accounts Payable Transaction enquiry) of transaction details includes a prepayment indicator – posted items that have a corresponding prepayment record display a ‘P’ in this field

This option has been enhanced to display the posted prepayment details

This option has been enhanced to display the posted prepayment details

Highlight the transaction then select the F12-More action to display the list of further options

Highlight the transaction then select the F12-More action to display the list of further options

DA1236 Prepayments



The option Prepayments has been added to the list of options available – highlight this option then select CR-Select to display the prepayment information for the selected transaction

The option Prepayments has been added to the list of options available – highlight this option then select CR-Select to display the prepayment information for the selected transaction

DA1236 Prepayments



The prepayment information for the selected transaction is displayed

The prepayment information for the selected transaction is displayed

DA1236 Prepayments


PrepaymentProcessing – Example

DA1236 Prepayments


Prepayment Calculations

Prepayment Calculations

The VAT amount is calculated from the gross amount entered as follows:

VAT amount = (gross amount / (100+VAT Rate) * VAT Rate

The VAT amount is then subject to the VAT rounding rules defined on the corresponding VAT Code record

The nett amount is calculated as:

Gross amount – VAT amount

DA1236 Prepayments


Accounts Receivable Cash Prepayment

For an Accounts Receivable prepayment item value £117.50 with a VAT code V (17.5%) the prepayment postings are as follows:

Accounts CR DR

Prepayment Control 117.50VAT Payable (V) 17.50Prepayment Account 100.00

A VAT Register record reflecting the above figures is also created

DA1236 Prepayments


Accounts Receivable Cash Prepayment

When the invoice or journal is matched to the prepayment cash item and posted the VAT register and General Ledger accruals are ‘reversed’:

Accounts CR DR

Prepayment Control 117.50VAT Payable (V) 17.50Prepayment Account 100.00

This example would be in reverse for Accounts Payable prepayments

DA1236 Prepayments


AuditingPrepaymentTransactions

DA1236 Prepayments


Auditing of Prepayment Transactions

Prepayments are distinguishable on the following audit reports, the corresponding VAT amounts are also shown:

Accounts Receivable Cash Audit Trail

Accounts Payable Cash Audit Trail

Accounts Receivable Journal Audit Trail – the transaction amounts are not detailed

Accounts Receivable Refund Audit Trail

Accounts Payable Journal Audit Trail – the transaction amounts are not detailed

Accounts Payable Invoice Audit Trail – if an invoice has been matched against a prepayment item, the G/L distributions list, if selected for printing, includes the prepayment reversals The VAT element of the reversals is not included in the VAT sub-totals, however, it is included in the VAT table at the end of the report

DA1236 Prepayments


Auditing of Prepayment Transactions

All prepayment items associated with an item can be archived using the following options:

Accounts Receivable Archive Transactions

Accounts Payable Transaction Archiving

Prepayments are distinguishable in the following options:

Accounts Receivable Archived Transactions

Accounts Payable Archive Transactions

1 of 23 da1236 prepayments last updated: march-2004 da1236 prepayments

Documents

da1236 prepayments

prepayment vat code

prepayment accounts

prepayments functionality

vat codes

prepayment control

prepayment amounts

prepayment processing