What is the best way to deal with vendor prepayments in QB? Click on this link to see if the information on How to Record a Deposit on a Purchase
Client wrote a cheque for $1,900 to a vendor for a leasehold improvements item. There was no paperwork and I was advised to book the cheque to "Other Current Assets" a/c "Vendor Deposits".
I have now been handed the invoice which shows the full amount of $3,800 less the deposit of $1,900, with a balance of $1,900, which has now been paid with a separate cheque.
Can this all be done through payables and the vendor a/c keeping it easily trackable? I can't see how as the first cheque was entered as a journal entry and they are in different months.
Thank you for any assistance,
Confused and clearly "green" :)
helps you out.
The link gives you two options ... for the future.
As you have already booked the prepayment in a previous accounting period, here is what I would do.
Make a journal entry moving the prepayment to accounts payable in the current period. Here's the journal entry:
Debit Accounts Payable (you'll need to enter the supplier's name)
Credit Vendor Deposits
Then go into bill payments and apply the credit to the appropriate invoice through the "setting credits" button.
Let me know how it works out.