Prepayment clearing feature is a functionality that makes it possible to connect prepayment and its return. For reminder, prepayment return must be added as a negative payment to the customer/supplier. Meaning: if you add a prepayment to a supplier, then it must be added as a positive payment to supplier. And if they return it, then it is a negative supplier payment.

Let’s imagine the following scenario: a customer pays for the order. Then it comes out you cannot ship the goods and you have to return the money. So you have a prepayment and a  prepayment return. As ERPLY Books logic is to show not confirmed prepayments in prepayment using module, then they would stay there now and forever. How to solve this? Using prepayment clearing feature of course!

To use prepayment clearing, go to Cash in / out, select both payments (yes, clearing works only for one payment pair), click More and Settlement. Now the following happens:

• System marks both payments as Confirmed
• System uses latest payments date for marking When the prepayment was used
• Special for currency payments: if both payments have foreign currency, the system calculates currency exchange rate loss/gain from prepayments:
  • System adds currency gain/loss transactions to the latest (usually prepayment return) prepayment
  • System uses exchange rates from both prepayments to calculate the currency gain/loss
  • Accounts are used as follows:
    • Prepayment account form latest prepayment
    • Currency loss system account