Managing Pre-payments to Vendors in QuickBooks

[@JJ-ew9lq]

This is very helpful to fix entries already made. I like to just use the Bill Date as the accounting period date. You can write the check now and you're done with it. It will show up in expenses in the proper period. if you need your balance sheet correct to show a report to someone, you just run the AP report as of the Reporting Period date, Make a Journal entry to zero out the prepaids to Prepaid Expense, Reverse it as of the day after the the reporting Period. You don't have to think hard, let the software do the work. One note: QB won't let you make a journal entry to AP without a vendor, so you make to entry to a current liabilities account that effectively grosses up the AP.

[@christinalee8032]

Hi J J, meaning in my balance sheet, the prepaid will still remain as a negative even after i have paid my vendor when the service ends and full invoice paid?

[@JJ-ew9lq]

@@christinalee8032 Hi Christina. I'm not sure what you mean, so I will give an example. On May 22 you enter a bill for July service. Use a Bill Date of July 1 and write the check as of May 22. From May 22 to June 30 the payment will show up as a negative in Accounts Payable and the bill does not show up on the the Accounts Payable or Profit and Loss. On July 1 the bill will hit the profit and loss and the Accounts Payable will show zero, no more negative. This can be useful if getting the bill in the right period is important because the QB software manages it for you. It just throws the AP off temporarily.

[@yvonnegtz1100]

Tried to create Prepaid Vendor Payment don't see B/C Assets - Other Assets on my list.

[@musacassataal3105]

This is a question (how to delete a payment received entered to rectify. Thanks

[@dgeller510]

Excellent hector. I've been using your first tip but #2 and #3 are great as well

[@jaycogswell5716]

In the first scenario, when we go to create the bill, if there is a PO existing do we want to receive against the PO?

[@TheTruthSeeker756]

Normally we made prepayments for a PO. Not following the credit to the bank account either. Normally that's a credit for an inventory item returned or miscellaneous credit that would hit a cost of goods sold account for me.

[@isabelordonez369]

Thank you sooo much, Hector, for your time and sharing your valuable knowledge. Extremely helpful (I totally agreed the below peer) :)

[@HectorGarciaCPA]

Thanks

[@ahmedmohamed3556]

0

[@benjaminrobles6797]

Hector how do I fix an adjusted purchase order amount and the deposit recorded prior to adjustment and not change the reconcile for one of the deposit?

[@nschneider45]

What if a double payment has been made? the new bookkeeper, issued a check for an monthly insurance premium that was already set up for autopay? The insurance company took both payments and the new bill shows a credit after they deducted the new bill. I thought maybe setting up a credit Memo for the total amount overpaid and pay the new bill by applying the credit... Not sure if it is proper to create a credit memo if the vendor has not issued one literally. I'd appreciate your input. As always. thank you

[@HectorGarciaCPA]

The money left the bank, so you need to categorize it as an expense/check transaction, if you categorize it as accounts Payable, that will be the same as a credit memo

[@waheedlive_studio5206]

I am going the write check option and less amount of vehicle rent transporation in the vender invoice please please say somthing if i am right way or not ???

[@lorena2684]

Thank you very much for these videos!!! They have helped me so much. Hector, will the last method work for prepaid expenses paid to a vendor, such as lodging, materials, etc that later need to be reduced from the invoice? Thank you so much in advance.

[@HectorGarciaCPA]

Lorena sure... but if you are tracking inventory; that’s different

[@martxyy]

Hello Hector. Thank you for the video. If say I do an advance payment of 2000, then I receive the bills partially how do I enter that bill independently since QB is giving me the error message "you cannot create a negative bill

[@asgharrasool1000]

After pre payment to vendors.. what are affects on inventory.... ?

[@HectorGarciaCPA]

Recieving the bill with the actual items

[@Frankitosway]

HELP. If I want to use the PREPAID VENDOR PAYMENT. for inventory i purchased in advance. PROBLEM is, how do you record when the VENDOR shorts your order. In other words, lets say I PREPAID $20k. and a week later I only $15k worth of product arrives. FOLLOWING hectors example would not work because in his example we get all or is actually partially paid in advance, not fully. My case is when I paid in FuLL and I happened to get less. Whats the best way to record that amount in Quickbooks so I can apply it on my next PREPAID VENDOR PAYMENT.

[@paidamoyochemhazo2526]

Please help us on this one

[@shahidmalik8252]

Hollo Sir, Very informative video you have shared, but there is one thing which has made me confused that is I have Imported goods so number of advance payments made to different vendors for this single import i.e Custom agents and actual supplier for a single import so could you please guide how this situation can be resolved in QB? Thanks

[@HectorGarciaCPA]

I dont understand the question

[@delfin1574]

Incredible helpful..thank you!!

[@SuperSharmin123]

Hi Hector , I am using quickbook online and I don't see the option to select item while writing a check. I tried your first version where it creat a negative AP balance but I also want to try version 4 to make it more sense in accounting perspective. Can you please show it in QBO..please ..Thanks

[@HectorGarciaCPA]

It’s different in online

[@SuperSharmin123]

@@HectorGarciaCPA do you have a video that shows how this needs to be done in quickbook online? If so, can you please give me the link of the video? I can't believe you actually replied to my message 😀.. thank you a lot for replying

[@shimabatti8889]

thank you for this clerification.......

[@HectorGarciaCPA]

Shima Batti you welcome

[@akisistemas8315]

No puedo poner en cheques jobs los proveedores no salen ?

[@HectorGarciaCPA]

Cierra QB y vuélvelo abrir.

[@mohammedrazzakify]

Hi Hector, I issued two pre payments to my vendor using the check to AP. No I have a - AP balance. Now I have just received the shipment and I'm trying to enter will with item # in inventory, and when I click save it gives me an error message "you can not use more than one a/r or a/p account in the same transaction". Do you know why I'm getting this message? Last time I did this it worked out ok but this time Im getting the error message.

[@HectorGarciaCPA]

Mohammed Razzak in the Expenses tab there is a line that says Accountants Payable, delete it... you’ll be ok

[@lightrainbowclouds4323]

I made the prepayment. but when trying to receive the inventory with bill against the PO, it showing "you can not do more than one A/R or A/P in the same transaction. Please advise how to solve itl

[@HectorGarciaCPA]

+Tex Tune erase the Accounts Payable account from the Expenses Tab in the bill

[@ashmmm77]

Thanks a ton . its working..!!!

[@AbdirahmanAbdullahi6545]

Thank you Hector. I have a question. Currently, I am setting a new quickbooks for a new client and the company has an outstanding multiple prepaid vendor payments, how can I handle this?.

[@HectorGarciaCPA]

+Abdirahman Abdullahi enter credit memos

[@waheedlive_studio5206]

Hi Have A Good Day Sir, How to Less Transportation charges in Vender Invoice charges in quickbooks ?

[@HectorGarciaCPA]

Use a negative amount

[@tatianarailean]

Great explannation!! but difficult and confusing anyway :(

[@mohammedrazzakify]

HI Hector, I saw your video on how to make prepayments and made two prepayments by writing out check and creating a -AP balance. How I'm receiving the product and wanted to receive with invoice, when I do that it give me an error message saying "you cannot use more than one A/R or A/P account in the same transaction", any idea why?

[@mohammedrazzakify]

Never mind you have answered this for me already!

[@HectorGarciaCPA]

Mohammed Razzak haha.. magic.

[@mardidunham2710]

Thanks so much Hector. This amazing and extremely helpful.

[@HectorGarciaCPA]

You welcome

[@waheedlive_studio5206]

Because i want less some charges in the vender bill !!

[@HectorGarciaCPA]

Not sure what you mean