The vendor prepayment function gives a company's controller the ability to minimize the risk by applying the segregation of duties between company departments and control the prepayment process, where accounts payable does not perform the prepayment transaction without assigning the prepayment linked to the purchase order and harmonizing the business process between procurement and accounts payable. Assume that the company has agreed with a vendor to supply goods to the company and the vendor has a condition to receive a prepayment before executing the goods delivery, and this is a normal practice in the daily business.
The vendor prepayment cycle is executed among the procurement agent, accounts payable, and bank accountants. ...
