Apply a Vendor Prepayment to a Bill in NetSuite

The quick answer

Open the purchase order you paid the deposit against and click Enter Prepayment. On the new Vendor Prepayment, replace Payment Amount (it defaults to the order total) with the deposit you actually paid, set Date to the day the money left, and save. Then click Apply on the saved prepayment. On the Vendor Prepayment Application page, check the Apply box on the bill the deposit belongs to, confirm Unapplied reads 0.00, and save. The prepayment turns Fully Applied and the bill's amount due drops by the deposit.

The screenshots show sample data. Person and operating-company names are fictional. Use your own records and values when following the steps.

Before you start

Vendor Prepayments has to be turned on under Setup > Company > Enable Features, on the Accounting subtab, under Advanced Features. You also need a vendor prepayment account, which must be an Other Current Asset account. Set the company default in Accounting Preferences, or on each subsidiary record in OneWorld. Your role needs the Vendor Prepayment permission to enter prepayments and Vendor Prepayment Application to apply them, plus access to the vendor, its purchase orders and bills, and an open posting period.

In this example, purchase order PO4318 is for a 12,800.00 hydraulic press frame from Kestrel Fabrication Works. The supplier asked for a 25% deposit before starting, and 3,200.00 was wired from 1010 Operating Checking on 09/08/2026, but nobody recorded it. Kestrel's bill KFW-2291 for the full 12,800.00 is already in NetSuite, next to an older open bill, KFW-2204 for 1,475.00, for a different order. Everything is in one subsidiary, US dollars, and one A/P account.

The bill was entered through Enter Bills, not billed from the purchase order, and it was saved before the deposit was recorded. The Auto Apply Vendor Prepayments preference only applies prepayments to bills created from the order with Bill or Bill Purchase Orders, so here you apply the prepayment by hand, which also lets you pick the exact bill.

The bill has to be open and eligible. Bills on payment hold or pending approval don't show up on the application page, and bills with vendor installments can't take a prepayment.

01. Open the purchase order

Open PO4318. It's Pending Receipt, and the Summary shows Total 12,800.00. With Vendor Prepayments turned on and the right permission, an open purchase order has an Enter Prepayment button in its button bar.

Purchase order PO4318 for Kestrel Fabrication Works with status Pending Receipt, Summary Total 12,800.00, and a red arrow pointing to the Enter Prepayment button. — PO4318 is Pending Receipt with a 12,800.00 total. Enter Prepayment is in the button bar.

You can also start from Transactions > Payables > Enter Vendor Prepayment and pick the payee and purchase order yourself. Starting from the order fills them in for you.

02. Record the deposit as a prepayment

Click Enter Prepayment. A new Vendor Prepayment opens with Payee Kestrel Fabrication Works and Purchase Order PO4318 already set. Account is the bank the money left from, 1010 Operating Checking here. Payment Amount defaults to the order total, 12,800.00, which is not what was paid. Prepayment Account shows 1360 Vendor Deposits, the default, and you can't change it on the transaction.

A new Vendor Prepayment with Payee Kestrel Fabrication Works, Purchase Order PO4318, Account 1010 Operating Checking, Prepayment Account 1360 Vendor Deposits, and a red arrow pointing to Payment Amount 12,800.00. — Starting from the order fills Payee and Purchase Order, and Payment Amount defaults to the full 12,800.00.

Replace Payment Amount with 3,200.00, the amount actually wired. Replace Date with 09/08/2026, the day the wire left. Check that Posting Period is the open period you want, Sep 2026 here. Only save a prepayment for money that actually went out, because it posts to the bank account.

The Vendor Prepayment form with Payment Amount changed to 3,200.00, marked by a red arrow, Date 09/08/2026, Posting Period Sep 2026, and Prepayment Account 1360 Vendor Deposits. — Payment Amount is now the 3,200.00 deposit, dated 09/08/2026.

Click Save. Vendor Prepayment 5127 opens with status Paid and Payment Amount 3,200.00. Saving debits the prepayment account and credits the bank account, 1360 Vendor Deposits and 1010 Operating Checking here. If your account routes prepayments for approval, the record saves as pending approval instead, and it can't be applied until it's approved. Nothing is applied yet, so the Applied To subtab is empty and the button bar now has Apply.

Saved Vendor Prepayment 5127 for Kestrel Fabrication Works with status Paid, Payment Amount 3,200.00, Date 09/08/2026, and a red arrow pointing to the Apply button. — Saved as Paid, with 3,200.00 sitting in 1360 Vendor Deposits and an Apply button.

03. Open the application and review the bills

Click Apply. A new Vendor Prepayment Application opens for Kestrel Fabrication Works, with Application Of Vendor Prepayment #5127. Check that Account is the A/P account the bills use, 2000 Accounts Payable here. That account decides which bills are listed. The Summary shows Total 3,200.00, Applied 0.00, and Unapplied 3,200.00.

A new Vendor Prepayment Application for Kestrel Fabrication Works with Account 2000 Accounts Payable, Application Of Vendor Prepayment #5127, and a Summary showing Total 3,200.00, Applied 0.00, Unapplied 3,200.00. — Before anything is checked: Total 3,200.00, Applied 0.00, Unapplied 3,200.00.

Scroll to the Apply subtab. It lists Kestrel's open bills that share the prepayment's subsidiary, currency, and A/P account. KFW-2204 is due 09/11/2026 with Amt. Due 1,475.00. KFW-2291 is due 10/24/2026 with Amt. Due 12,800.00. The deposit was paid against PO4318, so it belongs on KFW-2291.

The Apply subtab with Auto Apply and Clear buttons lists two unchecked bills: KFW-2204 due 09/11/2026 with Amt. Due 1,475.00, and KFW-2291 due 10/24/2026 with Amt. Due 12,800.00. — Two open Kestrel bills. Only KFW-2291 is for PO4318.

04. Apply the deposit to the order's bill

Check the Apply box on the KFW-2291 row. Payment fills with 3,200.00, the smaller of the bill's 12,800.00 due and the prepayment's 3,200.00 unapplied. Leave KFW-2204 unchecked, and don't click the Auto Apply button on this page, which picks the bills for you. That button is separate from the Auto Apply Vendor Prepayments preference.

KFW-2291 is checked on the Apply subtab and a red arrow points to its Payment of 3,200.00, while KFW-2204 stays unchecked with an empty Payment. — Only KFW-2291 is checked, and its Payment is the full 3,200.00 deposit.

Scroll back up. The Summary now reads Applied 3,200.00 and Unapplied 0.00.

The unsaved Vendor Prepayment Application Summary shows Total 3,200.00, Applied 3,200.00, and Unapplied 0.00. — Applied 3,200.00, Unapplied 0.00: the whole deposit is going to KFW-2291.

Click Save. On the saved application, the Apply subtab lists only KFW-2291, with Orig. Amt. 12,800.00 and Payment 3,200.00. Saving debits 2000 Accounts Payable and credits 1360 Vendor Deposits.

The saved application's Apply subtab shows one bill, KFW-2291 due 10/24/2026, with Orig. Amt. 12,800.00 and Payment 3,200.00. — The saved application puts 3,200.00 on KFW-2291 and nothing on KFW-2204.

05. Confirm the prepayment is used up

Click the Application Of link, Vendor Prepayment #5127. The prepayment now reads Fully Applied, and the Apply button is gone.

Vendor Prepayment 5127 for Kestrel Fabrication Works with status Fully Applied, Payment Amount 3,200.00, and only Edit, Back, and Actions in the button bar. — The same prepayment, now Fully Applied, with no Apply button.

Its Applied To subtab lists bill KFW-2291 with Original Amount 12,800.00 and Applied Amount 3,200.00.

The Applied To subtab on Vendor Prepayment 5127 lists bill KFW-2291 with Original Amount 12,800.00 and Applied Amount 3,200.00. — Applied To shows where the deposit went: 3,200.00 on KFW-2291.

06. Check what's still owed

Go to Transactions > Payables > Pay Bills. KFW-2291 shows Original Amount 12,800.00 and Amount Due 9,600.00, which is 12,800.00 less the 3,200.00 deposit. KFW-2204 still shows 1,475.00 due. Leave the page without saving. If a bill is on payment hold or pending approval, it won't appear here, so open the bill itself instead. The application didn't move any cash. It moved the 3,200.00 from the prepayment account to accounts payable, which is why the bill owes less. The 9,600.00 balance gets paid with a normal bill payment when the frame is delivered.

Pay Bills lists four open bills. A red arrow points to KFW-2291 from Kestrel Fabrication Works with Original Amount 12,800.00 and Amount Due 9,600.00. KFW-2204 shows Amount Due 1,475.00. — KFW-2291 now owes 9,600.00. KFW-2204 is untouched at 1,475.00.

Check the result

The prepayment reads Fully Applied and its Applied To subtab lists only the bill you chose.
The saved application shows Applied equal to the prepayment's Payment Amount and Unapplied 0.00.
Pay Bills shows the bill's Amount Due reduced by exactly the deposit.
Other open bills for the same vendor still show their full amount due.

If Unapplied isn't 0.00 when you save, the rest of the deposit stays unapplied on the prepayment and it won't read Fully Applied. That's fine if you mean to split it across bills. Apply the remainder later to one or more eligible bills.

Common questions

Why doesn't my bill show up on the Vendor Prepayment Application page?

The Apply subtab only lists open bills for the same vendor, subsidiary, currency, and A/P account as the application. Check the Account field first, since that's the one people miss. Bills on payment hold or pending approval are left off too, and bills with vendor installments can't take a prepayment at all.

What's the difference between Paid and Fully Applied?

Paid means the prepayment is recorded and the money is out of the bank, but nothing has been applied to a bill yet. Fully Applied means the whole amount has been applied. Here the 3,200.00 prepayment went from Paid to Fully Applied once it was applied to KFW-2291.

What does Auto Apply Vendor Prepayments do, and how is it different from the Auto Apply button?

The Auto Apply Vendor Prepayments preference in Accounting Preferences applies an eligible prepayment for you when you bill its purchase order with the order's Bill button or Bill Purchase Orders. It doesn't touch bills entered through Enter Bills, which is why KFW-2291 was applied by hand. The Auto Apply button on the application page is a separate tool that picks bills and spreads the prepayment across them for you. Skip it when the deposit belongs to a specific bill.

Can I split one prepayment across several bills?

Yes. Check each bill on the Apply subtab and type the amount you want on each one in Payment, as long as the total doesn't go over the prepayment's unapplied amount. Whatever you don't apply stays on the prepayment for a later application.

What does this do to the general ledger?

Saving the prepayment debits the vendor prepayment account (1360 Vendor Deposits) and credits the bank account the money left from. Saving the application debits accounts payable (2000) and credits the prepayment account, which lowers what the bill owes. No second cash payment is created.

Should I use a vendor prepayment or a partial bill payment for a deposit?

Use a vendor prepayment when you pay before you're billed, or when you want the deposit to sit as an asset until the bill exists. A partial bill payment only works once the bill is already in NetSuite, and it pays that bill directly. If the bill is already there and you know the deposit belongs to it, either gets you to the same balance due. The prepayment also keeps the link to the purchase order.