PART 1 – Understanding the Core Logic Behind Automated Vendor Prepayments in Business Central
Managing prepayments can be challenging for businesses that work with multiple vendors on the same Purchase Order.
In many industries, especially those that handle specialized procurement or complex supply chains, it is common for a single PO to include several lines that each involve a different vendor. This means every vendor has different payment terms, different prepayment requirements, and different financial workflows.
A client in the gas distribution industry had this exact issue: each PO line belonged to a different vendor, and every vendor required a separate prepayment invoice, payment, and auto-application before goods could be received. Because of strict financial controls and vendor requirements, nothing could be posted or received until each prepayment was correctly processed and applied.
Why Standard Business Central Was Not Enough
Business Central supports prepayments, but only at the Purchase Order header level, not line by line.
This means BC assumes the entire PO is for a single vendor, which is not always true in real-world scenarios.
In addition, standard BC does not automatically:
- a. Create prepayment invoices per vendor
- b. Create vendor payments
- c. Apply the payment to the prepayment invoice
- d. Allow the user to reuse existing open payments
This forces users to manually:
- Create a prepayment invoice
- Enter or post a payment
- Apply the payment to the invoice
- Update internal records
- Repeat the same steps for each vendor on the PO
Thus, managing prepayments became a manual and error-prone process. As the number of PO lines increased, the amount of duplicated work increased as well, leading to delays, mistakes, and inconsistencies across the system.
Our Solution – A Custom Prepayment Engine
To solve this, we built a customized “Prepayment Lines” page where users can manage prepayments at the line level instead of the header level.
On this page:
- a. Each PO line is loaded individually
- b. The user can assign a vendor, item charge, currency, and amount
- c. The user can choose to create a new payment or use an existing open payment already posted for that vendor
This gives the user full control while keeping everything in one place.
When the user confirms, Business Central automatically:
- a. Creates a Prepayment Invoice for each line
- b. Creates a Payment for that invoice (if not using an existing payment)
- c. Applies the Payment to the Prepayment Invoice
- d. Stores the invoice/payment reference on the line for full traceability
All of this happens in a single automated process without requiring the user to manually open journal pages or vendor ledger entries.
To conclude, this transformed a lengthy, manual workflow into a fully automated one. What previously took many steps across multiple pages and required careful tracking is now processed reliably with one action, saving time, reducing errors, and ensuring that goods can be received without financial delays.
We hope you found this blog useful, and if you would like to discuss anything, you can reach out to us at transform@cloudfronts.com
