Accounting for Advanced Payments
If you find yourself in a situation where you have to pay a PO partiall or in full before receiving a bill, then you need to watching this QuickBooks tutorial on Accounting for Advanced Payments.
Advanced Payments in QuickBooks
Today’s question comes from Abdul in the quickbooks forum section
I am in the retail business, almost all suppliers require that you pay an advance to them after submitting your purchase order.
My question is, how can i record the advance paid to the supplier after creating the purchase order keeping in mind that I still havent recieved the inventory?
Also, are purchase orders in quickbooks only limited to inventory or can it be used for transactions that do not require invnetory.
For example a purchase order for an exhibition that we are planning to attend. And how do i record the advance for that too.
When you write them a check for the advance payment use Accounts Payable as the account and put the Vendor Name in the Customer/Job field. That payment will show as a credit in their account which you will apply to the bill when paying it.
Yes, you can use them for non-inventory items, but it must be set up in the Item List as Non-Inventory or Other Item.
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