Single large Prepayment to a Vendor intended to be applied to several P.O.'s

How do I process a single large Prepayment to a Vendor intended to be applied to several P.O.'s throughout the year?

 

I have a customer that pays a vendor for all the items they purchase from this vendor throughout the entire year up front, which is a huge prepayment; however, my logic is fuzzy as to how to represent this on the G/L properly and process the check for the payment.

My customer is paying the vendor with a check and so I know I need to start in the Bill Payable Journal to be able to process the check, but this is where I am confused… what do we do once we’ve posted an unapplied payment to the Vendor account? How do we get that payment to register as a prepayment on the G/L rather than looking like a payment for past purchases? We have a prepayment account setup on the Chart of Accounts for ‘Prepayments for Inventory’, but I don’t see a way to utilize it in the Bill Payable Journal. Do I need to perform additional General Journal Entries after clearing & posting the check? What would I balance the ‘Prepayments for Inventory’ account with? Once it is represented on the G/L how would I utilize this account to apply to Purchase Orders throughout the year, just apply to the initial unapplied payment? If so, does that mean I would need to manually reduce the prepayment account manually for every P.O.?

The only instructions I can find for prepayments on MSDN (https://msdn.microsoft.com/en-us/library/hh169367(v=nav.90).aspx) would apply to an individual Prepayment Invoice to a single Purchase or Sales order, or even multiple prepayments to a single P.O. or S.O. invoice, but not for a single large prepayment to apply to multiple invoices over an extended period of time (in this case over the whole year).

Is this a customization we would need to make to add ‘Prepayment’ as an additional payment type that can be selected in the Bill Payable Journal for an example? Any possible solutions that would work without customizing NAV?

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