# Applying Vendor Prepayment

Vendor prepayment is an advance payment for goods and services purchased. Usually, if the prepayment is recorded on a purchase order or is linked to a purchase order, it automatically gets applied when the bill is generated.

However, you can also manually apply the prepayment when paying a bill. For instance, if the prepayment amount exceeds the bill amount, or if multiple bills need to be paid using a single prepayment, the manual application becomes essential. Additionally, the manual application allows for greater flexibility and control over the allocation of prepayment amounts to specific bills.

### Manually Applying a Prepayment to a Bill

To manually apply a prepayment to the bill, follow the steps below:

* Navigate to `Bill > Options > Pay bill`.

  <figure><img src="/files/mgttzZ6OVHCj7Pppbrah" alt=""><figcaption></figcaption></figure>
* On the "Bill Payment" screen, click on the amount listed under the "Credit" field.

  <figure><img src="/files/QyOwncuytcYGmG3fUlDw" alt=""><figcaption></figcaption></figure>
* In the "Add Credit" module, select the **Prepayments** tab. You'll see the number of prepayments available displayed on the tab.

  <figure><img src="/files/G2wGqbH6Y2ClX3Ob2meX" alt=""><figcaption></figcaption></figure>
* To apply the prepayment to the entire bill amount, click on the "**Tick**" icon. If you wish to apply a specific prepayment amount, click on the number in the "**Apply**" column and input the desired amount.

  <figure><img src="/files/YdxWkYCiubOvfrVRX6QM" alt=""><figcaption></figcaption></figure>
* Proceed by clicking "**Apply Credit"** to apply the prepayment to the bill.

  <figure><img src="/files/deYXXJnf0EJN85mnVcMm" alt=""><figcaption></figcaption></figure>
* Click on "**Pay Bill"** to complete the bill payment.

  <figure><img src="/files/cP88jToQlkoGxuQM0X0a" alt=""><figcaption></figcaption></figure>

**Important:** If you're applying the prepayment at a later date, make sure to adjust the Payment Date to match the Bill Date. This is important for maintaining accurate financial and inventory records and ensuring that the payment reflects the correct billing period.

<figure><img src="/files/ji3S0NZQ3VljQOmueLnP" alt=""><figcaption></figcaption></figure>

### How to Unapply a Prepayment?

If a vendor prepayment has already been applied to a bill and needs to be removed, it must be unlinked by voiding the related Bill Payment record. Voiding the Bill Payment will automatically remove the applied prepayment from the bill.

To unapply a prepayment, follow the steps below:

**Step 1:** Open the required Bill that has been paid using an applied prepayment amount.

**Step 2:** Click the **Options** drop-down menu and select **Show Payments**.

<figure><img src="/files/SsBYZ6OcoA6bnNX4Pm0j" alt=""><figcaption></figcaption></figure>

**Step 3:** A new window will open displaying the **Bill Payment Centre.**&#x20;

<figure><img src="/files/AThAQ6zmQA2yATvhcDW6" alt=""><figcaption></figcaption></figure>

**Step 4:** Double-click on the relevant **Bill Payment Number** and the Bill Payment screen will open.

<figure><img src="/files/2pHLxXviDgVWPzt6udBU" alt=""><figcaption></figcaption></figure>

**Step 5:**  Click on the **Options** drop-down menu and select **Void.**&#x20;

<figure><img src="/files/OfuwsSi6jSDUPsR0Q2DQ" alt=""><figcaption></figcaption></figure>

Step 6: Click **OK** to confirm the action. The Bill status will change from **Paid** to **Open**, and the applied prepayment will be unapplied.

<figure><img src="/files/BXRbs7tfo5zTHCrTkmIM" alt=""><figcaption></figcaption></figure>

<figure><img src="/files/Fc6bxBYLnJokKa3t8fzc" alt=""><figcaption></figcaption></figure>

{% hint style="info" %}
You can check whether a bill has any prepayments applied by selecting **Show Prepayments Applied** from the **Options** drop-down menu.
{% endhint %}


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