Customer prepayments are common in contract work and build-to-order manufacturing. The detail that matters is how that prepayment gets consumed when you ship and invoice in pieces, because that impacts what the customer owes on each invoice and how your team answers questions about remaining balances.

Cetec ERP lets you attach a prepayment to a customer quote or sales order and decide whether it applies to the whole order or to individual lines. The right choice depends on whether you want the prepayment to flow to invoices based on what ships, or to be allocated evenly by line item.

Enable Line Prepayments

If you want the option to prepay by line, set the configuration setting "Allow Line Prepayments" to 1. This exposes the line-level allocation options when you enter a prepayment against a quote or order.

Add a Prepayment to a Quote or Sales Order

Create a quote or sales order, then select the Prepay option in the left-hand navigation. Cetec ERP opens a pop-up window where you enter the prepayment amount and choose how it should apply.

Apply a Prepayment to the Entire Order

When you apply a prepayment to the entire order, each shipment and invoice consumes the prepayment automatically, using as much of the remaining prepayment balance as is available. This is typically the simplest approach when you do not care about distributing the prepayment across line items.

Example: an order has 10 lines at $100 resale per line and a $500 prepayment. If you ship 3 lines, $300 of the prepayment applies to that shipment and $200 remains. If you ship 3 more lines, the remaining $200 applies to that shipment and the invoice shows $100 due.

Use this approach when you want the system to treat the prepayment as a general deposit against the order, especially when shipments are uneven and you do not need each invoice to retain an open balance.

Apply a Prepayment to Individual Lines

If you apply the prepayment to individual lines, the shipments and invoices will include proportional prepayment amounts by line item. This keeps each partial invoice more consistent, because each shipped line carries its share of the prepayment rather than letting early shipments consume the full deposit.

In the prepayment pop-up, scroll down to see the order lines and an amount field next to each line. You can enter amounts line by line, or you can use the "Prepay Lines" percentage field to auto-populate the line amounts based on a percentage.

Use line prepayments when you want more even cash application across multiple invoices, especially when you expect a series of partial shipments.

Example: an order has 10 lines at $100 resale per line and a $500 prepayment. If you allocate $50 per line and ship 3 lines, $150 of the prepayment applies to that shipment. The customer owes $150 on that invoice and $350 remains. Ship 3 more lines and $150 applies again, so the invoice shows $150 due.

Operational Notes and Guardrails

The two methods behave differently on partial shipments. If you want each invoice to retain an open balance and spread the deposit across the order, allocate prepayments by line. If you want the deposit to be consumed as shipments occur until it is exhausted, apply it to the order total.

• Line-level prepayments help keep cash application more even across multiple invoices.
• When using line prepayments, you cannot apply more than the extended resale value for a given line.
• The sum of all line allocations cannot exceed the new prepayment amount. A $500 prepayment cannot be allocated as $600 across lines.

For a detailed walkthrough of creating and processing customer prepayments, refer to the Cetec ERP support guide: https://cetecerp.com/support/how-to/how-to-create-and-process-customer-prepayments-on-orders.html

Key Takeaways

• Order-level prepayments are consumed by each shipment until the deposit balance is used up.
• Line-level prepayments allocate the deposit across lines so partial invoices include proportional prepayment amounts.
• Enable line prepayments by setting "Allow Line Prepayments" to 1.
• Line allocations cannot exceed a line’s extended resale value, and the total cannot exceed the prepayment amount.
• Choose the approach based on how you want the deposit to behave across partial shipments and invoices.

Conclusion

Prepayments are straightforward until an order ships in pieces. By deciding up front whether a deposit should apply to the whole order or be allocated across lines, you keep invoice balances predictable and reduce confusion when customers compare shipments, invoices, and remaining prepayment balances.