This is the suggested method for creating prepaid purchase orders / vendor deposits
When a vendor requires a deposit or prepaid on product, you will not want to generate the vendor invoice until the product has arrived (to maintain inventory integrity). By following the method below, you will be able to keep track of the funds as a credit AP for application to the eventual invoice.
- Accounting Menu
- General Journal
- New Journal Entry
- Select the Customer/Vendor icon
- Filter for your vendor
- select PAYABLE for the vendor's AP record.
This will create the first entry in your Journal Entry. Enter the amount that you will Pre-Pay as a debit, and then for your second line select an appropriate clearing account. Note that the Reference # will become the AP invoice number in reports. Ensure you post your completed JE.
Now you can write your cheque, using the Banking Transactions process, pulling the funds from the clearing account used in your Journal Entry:
Your Prepayment/Deposit will appear in you AP Aging report:
When you are eventually invoiced, you will select the vendor invoice AND the Credit invoice and pay the difference, or use a part of the credit to offset the bill.