To work with vendor prepayments, the feature has to be enabled first.
To enable the Vendor Prepayments feature:
Navigate to Setup > Company > Setup Tasks > Enable Features.
Click the Accounting subtab.
Under the Basic Features section, verify that the A/P box is checked.
Under the Advanced Features section, check the Vendor Prepayments box.
Click Save.
After enabling the Vendor Prepayments feature, we must configure a default vendor prepayment account. This can be a new or existing account that is an Other Current Asset type. This is the account that the NetSuite system selects by default when entering a new vendor prepayment transaction.
We can configure the vendor prepayment account at the company level. Using NetSuite OneWorld, we can configure the account at each subsidiary level. By default, subsidiaries in NetSuite OneWorld use the account settings at the company level but we can configure a different prepayment account for a subsidiary.
We start providing deposits to our vendor by entering a new vendor prepayment. When the prepayment is complete, the status of the transaction is paid. The bank or credit card account is credited, while the prepayment account is debited.
After entering a vendor prepayment, you can immediately apply the prepayment amount to bills from the same vendor, or we can complete the application at a later time.