NetSuite Vendor Advance Payment

Vendor Advance Payment is when payment is made to a vendor before the vendor supplies the required service or material.

As per NetSuite help, the suggested advance payment process involves first writing a check against a clearing ledger account and then issuing a vendor credit against the account, which can later be adjusted against an invoice.

Also, the journal entry for the TDS on the advance is required to be passed separately.

Actual Payment tobe process will be generated considering both base Amount and TDS amount.

The Netsuite vendor advance process has been simplified via the plugins created by Powersoft to provide better visibility, tracking and automatic taxation effects. The details are mentioned below.

Advance Process Flow :

• Option provided to create an Advance Payment request. This request can be against a PO or without a PO
• An option has been made available to tag “Advance to Supplier GL account” to either Vendor Service or Material Advance for better visibility on the type of advance given to the vendor
• Option created to approve an “Advance Payment request” as per the defined workflow
• After approval, the payment can be processed either by releasing multiple partial payments or one full payment
• As part of the payment process, automatic TDS deduction accounting will apply as per the TDS applicable based on the combination of vendor + services
• On receipt of a vendor invoice, advance payment can be applied against the invoice, either partially or fully. On application of advance against an invoice, an automatic reverse TDS entry which is generated.
• Business rule can be defined on advance amount based on payment terns in Approved PO.