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 a 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 the Account tab. When the supplier bills you, create a Vendor Bill in QBO and use an appropriate account. That will clear the vendor’s 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 the 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 a 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 the expense account to be charged. On the next line, select Pre-Payment to Supplier account and enter it as a negative amount. If the received bill is the same as pre-payment then, it will net out as zero entry. But if the actual bill says higher than the pre-payment amount then, you just make the payment for the difference. That will clear the account.

ENTER BILL AND CLEAR THE PREPAYMENT ACCOUNT

SUPPLIER ACCOUNT


QuickBooks Online Tutorial Videos


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

 

%d bloggers like this: