How to enter prepayment to the vendor supplier. How do I match vendor bill received later?

You have two ways of recording the transactions depending on the type of supplier pre-payment. Is it quick turn around or will it take a longer time to complete the job or service?

1) When you make vendor pre-payment, use Accounts Payable (A/P) under Account tab. When supplier bills you, create a Vendor Bill in QBO and use an appropriate account. That will clear the vendor pre-payment balance. This is the easy way to enter the transactions especially say if you can record both entries within less than a month. You will then need to match pre-payment and entered Bill to clear the account by clicking Pay Bills tab (Create + sign > Vendors > Pay Bills).

 
PREPAYMENT

 
ENTER BILL

 
MATCH PREPAYMENT AND BILL

 
2) You may use this method if pre-payment to the supplier will take longer than 30 days to clear. In order words, for example, you make pre-payment job in January and the job will not be complete until June.

To set up pre-payment to the supplier, create a new account. You would set up “Pre-Payment to Supplier” as other current assets in QBO
 
SETUP PREPAYMENT SUPPLIER ACCOUNT

 
When you receive a Bill, enter expense account to be charged. On next line, select Pre-Payment to Supplier account and enter it as a negative amount. If the received bill is exactly the same as pre-payment then, it will net out as zero entry. But if the actual bill says higher than pre-payment amount then, you just make the payment for the difference. That will clear the account.
 
ENTER BILL AND CLEAR PREPAYMENT ACCOUNT

 
SUPPLIER ACCOUNT

 
If you have questions, be sure to join our QuickBooks Forum.

#QBOforum #QuickBooksforum
FREE “QuickBooks Online forum” to check when you need help

✔️ Free QuickBooks questions
✔️ QuickBooks questions and answers
✔️ QuickBooks accounting questions
http://newqbo.com/dwqa-questions/

ASK QUESTION

 


BUY QUICKBOOKS NOW!!! QuickBooks Online – Anytime, Anywhere. Easily Track Sales, Bills and Expenses.