If the prepayment invoice has not been paid it is of course possible to remove the first prepayment and post a new one. But if the prepayment has been paid, it is no longer possible to remove the prepayment and the user is blocked and need to fix this manually via a lengthy process

It should be possible to generate a prepayment credit note.

The approach with removing the first prepayment invoice and then posting a new invoice when the prepayment has not been paid, is in some cases also a problem, because the vendor have issued a credit note for the change in the prepayment amount and not a new invoice.

In this scenario I have not considered the option of Fixed prepayment, but if fixed is used the validation for lowering the prepayment amount happens already in the update of the prepayment amount. Our customer is primarily using the percent option because they always have 100% prepayment.

Another suggestion (fix)
When performing the final invoicing for a purchase order with prepayment, it is currently only possible to apply an amount up to the invoice total. More scenarios could be covered if it were possible to “over apply” which then should result in a credit note!
Ideally both the option to “over apply” or/and post prepayment credit notes should be supported.