On the AR Side, when you generate the shipment invoice, lets say for $500, if you have an advance billing for the Sales Order for say $100, the invoice is automatically generated for $400.
I assume it is similar to AP, but I could be wrong, be sure to test it.
Yes, although one is a “Prepayment” and the other is an “Advance Billing”, I guess it depends on each companies specific process, how you receive the money from the supplier, and based on that which one to use. Test both and choose the one that aligns better with your company.