- Feature
- Line-level customer prepayment flow
- Availability
- Generally available in Finance 10.0.49
- Industry focus
- Industrial machinery and equipment OEMs
Anyone who has sold a packaging line, a machining cell or a bespoke conveyor knows that deposits are not a nice-to-have. Long-lead engineered equipment ties up working capital for months before anything ships, so customers are asked to pay part of the price upfront. The difficulty is that the deposit rarely relates to the whole order. It relates to particular things on the order, and the finance system has not always been able to reflect that.
The industry challenge
A typical machinery order is a mix of very different deliverables. One sales order might carry a built-to-order base machine, safety guarding, a spare parts kit, installation, commissioning and operator training. The commercial terms differ line by line: a substantial deposit on the engineered equipment, nothing on standard spares, and payment on completion for services.
When prepayments can only be handled at order header level, finance teams fall back on workarounds. They split one commercial order into several system orders, keep allocation spreadsheets beside the ERP, or post manual adjustments when part of an order ships early. Each workaround creates its own problems: deposits that cannot be traced to the equipment they secure, confusion when spares are invoiced ahead of the main machine, extra work at month end, and customer statements that do not match the contract the customer signed.
What Microsoft delivered in Finance 10.0.49
Finance 10.0.49 adds a parameter in accounts receivable that lets an organization choose whether customer prepayments are handled at header level or at line level. The option applies when the Prepayment customer invoice feature is active.
With line level selected, prepayment amounts can be associated with individual sales order lines rather than the order as a whole. That brings the system's view of a deposit closer to the way machinery contracts are actually written, line by line and deliverable by deliverable.
Where the value shows up
| Business area | Impact |
|---|---|
| Order to cash | Deposits are tied to the deliverables they secure, so partial shipments no longer muddy the picture |
| Working capital | Deposits can be required on long-lead engineered items without adding friction to spare parts sales |
| Month-end close | Fewer manual allocations and adjusting journals when orders ship in stages |
| Customer experience | Prepayment invoices and statements that mirror the signed contract, which reduces queries from customers' payables teams |
| Audit and tax | Clearer trail from contract terms to prepayment invoice to final invoice |
A worked scenario
(An illustrative example.) A mid-sized OEM sells a robotic palletizing cell to a food producer. The order has five lines: the robot cell, safety guarding, a spare parts kit, installation and operator training. The contract asks for a deposit on the robot cell and guarding only, with everything else invoiced on delivery.
With line-level prepayment switched on, the receivables team raises a prepayment invoice against the two engineered lines. The spare parts kit ships early and is invoiced in full with no deposit to unpick. Sixteen weeks later the cell ships, and the deposit is applied against the lines it was taken for. The customer's accounts payable team receives documents that read exactly like the contract, and the OEM's finance team has nothing to reconcile by hand.
Adoption considerations
- Check the prerequisite. The option sits alongside the Prepayment customer invoice feature, so confirm that feature is enabled and understand how it interacts with any existing prepayment process.
- Set a policy, not a habit. Header versus line is a parameter decision with company-wide effect. Agree which approach suits your contract mix before changing it.
- Involve tax advisers. VAT and sales tax treatment of prepayments varies by jurisdiction; confirm how line-level prepayment invoices should be taxed where you trade.
- Test the awkward cases. Partial deliveries, cancelled lines, price changes after the deposit and credit notes should all be run through a sandbox before go-live.
- Align sales and finance. Quote and contract templates should state deposit terms per line so that order entry can capture them correctly.
The bottom line
For machinery makers, the deposit is part of the commercial design of the deal, not an afterthought. Line-level prepayment lets the finance system follow that design instead of forcing the business to bend around it. The gains are cleaner cash collection, a faster close and fewer awkward conversations with customers. If your order book mixes engineered equipment, spares and services, it is worth reviewing your prepayment process with an experienced Dynamics 365 Finance adviser before you change the parameter.
Source: Microsoft: What's new or changed in Dynamics 365 Finance 10.0.49