1. Click Accounts receivable> Setup> Parameters , and then click the Ledger and sales taxtab.

   Note
   For vendors, click Accounts payable> Setup> Parameters , and then click the Ledger and sales taxtab. To set up prepayment to vendors, follow the same steps that are outlined in this topic, but in the Accounts payablesection.

2. If sales tax is calculated and posted when you post a prepayment, select the Sales tax on prepaymentcheck box.

3. Enter a posting profile in the Posting profile with prepaymentfield to indicate the accounts to which the prepayment and prepayment sales taxes are posted. The posting profile that you select in this field must include: a summary account for prepayments, and, if the Sales tax on prepaymentcheck box is selected, a ledger account for Sales tax prepayments.

1. Click Accounts receivable> Journals> Payments> Payment journaland create a journal.

2. On the Setuptab of the journal, select the Amount incl. sales taxcheck box if you want to post the prepayment including sales tax.

   Note
   For vendors, click Accounts payable> Journals> Payments> Payment journal, and follow the same steps.

3. In the Payment journal, click Linesand create the payment line.

4. On the Paymenttab, select the Prepaymentfield. The posting profile changes automatically to the prepayment posting profile.

5. Post the prepayment.

1. In the invoice journal lines, click Functions> Settlement.

2. In the Open transaction editingform, settle the invoice with the prepayment.

   Note
   If you select a prepayment for settlement of the invoice, you receive a message that the marked payment transaction is a prepayment.

The settlement of the invoice reverses the transactions in the summary account and in the Sales tax prepaymentsof the prepayment posting profile. At the same time, a payment transaction settles the invoice and posts the amounts to the ledger accounts of the standard posting profile for the customer or vendor.