Record Vendor Prepayments Or Deposits For Prepaid Parts Or Services

While ordering some services from your vendor, you have to pay some part of the amount to that vendor before you get your service delivered. You have following two option to enter the prepayments or deposits:

  • By using Accounts Payroll
  • By using an Asset account

You should consult your accountant to know which of the option is best for you.

Option 1: Use Accounts Payable To Record Prepayment

The checks can be written to the vendor and recorded to your Account Payable account by reducing the balance until you are all set to the enter the complete bill.

  • Create a check for the vendor.
    • Go to the Banking menu and choose Write Checks
    • Enter all the information asked in respective fields.
    • Navigate to the Expenses
    • Provide Account Payable in the account section.
    • From the Customer: Job column, click on drop-down icon and then choose the vendor to which you want to apply the payments.
    • Select Save and then Close.
  • Enter the bill
    • Go to the Vendors menu and select Enter Bills or Receive Items
    • Provide the required information in the respective fields.
    • Select Save and then Close.
  • Apply the prepayment to a bill.
    • Go to the Vendors menu and select Pay Bills.
    • Choose the bill that will be linking with the prepayment.
    • Select the Set Credits
    • The prepayment will be displayed in the Set Credit screens and ensure that the checkbox is marked.
    • Select Done.

Note: A bill Payment Check automatically by QuickBooks is you see balance due in the bill.

Option 2: Use An Asset Account To Track The Prepayment

The checks can be written to the vendor and recorded to your Other Current Asset account by increasing the balance until you are all set to the enter the complete bill.

  • Create an Other Current Asset account for tacking the prepayments.
    • Go to the List menu and select Chart of Accounts.
    • Right-tap on the Chart of Accounts and select New from the drop-down options.
    • Right-tap on Other Account Types and select Other Current Asset option from the drop-down options.
    • Select Continue.
    • For the Account Name, enter Prepaid Inventory.
    • Select Save and then Close.
  • Write a check to your Vendor
    • Go to the Banking menu and select Write Checks.
    • Enter all the important details.
    • Select Expenses and then choose OCA option from the Account section.
    • Select Save and then Close.
  • Enter the bill once you get the item.
    • Go to the Vendors menu and select Enter Bills.
    • Navigate to the Expenses tab and select the OCA
    • Enter the prepayment amount as negative.
    • Add items under the Items
    • Select Save & Close.
  • Pay the bill balance
    • Go to the Vendors menu and choose Enter Bills.
    • Once you are done will applying the prepayment, select the due balance and click on Pay Selected Bills.

To View Existing Payments

  • Go to the Reports menu and select Vendors and Payables > Vendor Balance Detail.
  • Select Customize Report and then navigate to the Display
  • Select the date range for the report and then go to the Filters
  • From the list, select the Account.
  • Choose the asset account from the drop-down options.
  • Click on OK.

Reach Us For Support

Follow the provided steps in order to record prepayments or deposits for prepaid parts or service without any issues. However, there can be some situations when you can face several errors and issues while recording vendor prepayments. The errors can be caused due to multiple reasons and you need to look into it to resolve them. For this, you can get in touch with the technical support department of getsupportnumber.com by dialing our toll-free QuickBooks Support Phone Number +1800-621-5491 for instant support.