Payments to Suppliers on Order of Goods
  • ECPL02

    Payments to Suppliers on Order of Goods

    by ECPL02 » Thu Oct 22, 2015 9:53 am

    Many of our suppliers require payment on order of goods.
    They issue us an invoice after receiving our Purchase Order (PO), and the invoice is payable immediately (or prior to shipment of the goods/stock to us).
    How do we best handle such advance payments to suppliers (without "Delivering" the stock)? We need to link the invoice payment to the PO that we generated however we do not want to show the goods as "delivered" until they actually arrive - which could be weeks later.

    When the stock arrives at some later stage - how do we "deliver" the stock so it appears with the correct arrival date and shows the Purchase Order as now fulfilled. But without generating another invoice.

    The Capital process works well for suppliers who we pay after receiving the goods i.e. Raise a PO, "Deliver" the PO when the goods arrive which automatically generates an invoice from the supplier, then finally we allocate a Payment against that invoice.
    However I am not sure what to do when we need to make payment up front.
  • COBS Tech Support
    Posts: 678
    Joined: Fri Sep 09, 2005 8:23 am

    by COBS Tech Support » Thu Oct 22, 2015 9:56 am

    Place a pre-payment under the supplier's account (unallocated payment) and use your PO number as your reference. You will need to apply the pre-payment to the supplier invoice once it is created, which will be after the goods have been received. It's always best to mirror in your system the events as they occur in the real world.

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