How to Apply a Prepayment on Accounts Payable (AP) Invoice?

A prepayment (payment in advance to your supplier) may be applied in 2 different ways on AP invoice: as a payment or as a reverse.

As a payment it will decrease invoice balance, as a standard payment

As a reverse it will decrease invoice total amount. Used when supplier is reversing prepayment from their customers by adding a negative line inside the invoice. Using this solution in AP you will have the real amount of the invoice.

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