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To transfer prepayment from one supplier to another, couple of transaction has to be created as there is no shortcut to do the needful. 

Firstly, make sure to create Payment document to show the Payment of the Prepayment to the supplier, here in this example, company B is the supplier to whom the prepayment has been transferred by the entity. A is new is the company to whom the prepayments needs to be transferred.

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1.Create an empty Bank Payment or Cash Payment for Supplier and don't post it:

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Payment Details tab:

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2. Create a Mutual Settlement document (Accounting > Service Tools > Mutual Settlements). Transaction Type Customer Supplier Debt Assignment:

In the Customer Supplier field, select Customer Supplier Recipient

In the Customer Supplier Recipient field, select Customer  Supplier

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3. At the Accounts Receivable tab Payable tab use the button Pick for choosing an empty Bank receipt Payment or Cash receipt Payment for Customer Supplier Recipient, double-click on the document, then press OK:

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4. At Payee Attributes tab, specify the Contract, Document, and Amount of Settlement:

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Accounts Amount and and Accounting Amount in the Accounts Receivable Payable Tab and and Amount of Settlements and Accounting Amount in the Payee Attributes Tab should match.

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6. As the Mutual Settlement document is posted, the corresponding record is created and documents are settled:

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Generate reports and check mutual settlements with the STATEMENT OF MUTUAL SETTLEMENTS  for each company  

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