Type of Prepayment in Oracle Apps R12

 Prepayment Invoice In Oracle R12:-

It's an advance amount paid by the Organization to supplier on purchasing of any item. Later it will adjust against purchase invoice.

A prepayment is a type of AP invoice you can enter to make an advance payment to a supplier or employee.

Example:- You need to pay a deposit on a lease, or pay an employee an advance for medical or travel expanse.

You can later apply the prepayment to one or more AP invoice or expanse reports you receive form suppliers or employees to offset the amount paid to them.

Pre-Payment Types in R12 Payables:-

There are two types of Prepayments

       1. Temporary Prepayment 

       2. Permanent Prepayment

1.  Temporary Prepayment:-Temporary Prepayment can be applied to invoice or expanse reports you receive. suppose we have make advance payment to supplier for some good after receive goods and its AP invoice  from supplier, we have to applies the prepayment to AP invoice. Or You use a advance tp pay a hotel a catering deposit. When the  hotel's bill (AP Invoice) arrives, apply the prepayment to the invoice to reduce the invoice amount you pay.(It will be adjusted against future Invoice).

2. Permanent Prepayment:- Permanent Prepayment can't be applied to AP invoice. Suppose, You use a permanent Prepayment to pay a lease deposit for which you do not expected to be any AP invoice.

It's a deposit with the supplier, but it will not be adjusted against future invoices. It's nothing but a security deposit.