Record Vendor Prepayments Or Deposits For Prepaid Parts Or Services

When you order some services from a vendor then you need to pay a some part of the price to the vendor before delivery. You get two following options for entering the prepayments or deposits:

1. By using Accounts Payroll
2. By using an Asset account

You need to contact your accountant to identify which option is suitable for you.

Option 1: Use Accounts Payable To Record Prepayment

You can write a check to the vendor and record it to your Account Payable account, decreasing the balance until you are ready to enter the final bill.

• Create a check for the vendor.
  • Click on the Banking menu and then select Write Checks
  • Provide the required information in the respective fields.
  • Click on Expenses tab
  • Enter Account Payable in the account column.
  • In the Customer: Job column, click the drop-down, then choose the vendor name.
  • Click on Save & Close
• Enter the bill
  • From the Vendors menu, click on Enter Bills or Receive Items.
  • Enter the required details in the fields.
  • Click on Save & Close
• Apply the prepayment to a bill.
  • From the Vendors menu, select Pay Bills
  • Select the bill that you will be associating with the prepayment
  • Click on Set Credits
  • The prepayment will be shown in the Set Credit screens and you need to make sure that it is marked.
  • Click on Done

Note: If you see a balance due in the bill then QuickBooks will create a Bill Payment Check.

Option 2: Use An Asset Account To Track The Prepayment

You can write a check to the vendor and record the prepayment to an Other Current Asset account, increasing the balance until you are ready to pay the final bill.

• Create an Other Current Asset account for tacking the prepayments.
  • From the List menu, click on Chart of Accounts
  • Right click on the Chart of Accounts and then click on New
  • Right click on Other Account Types and from the drop-down list, click on Other Current Asset
  • Click on Continue
  • Enter Prepaid Inventory as the Account Name
  • Click on Save and then Close
• Write a check to your Vendor
  • From the Banking menu, click on Write Checks
  • Provide the required information
  • Click on Expenses and from the Account column, click on OCA
  • Click on Save & Close
• Enter the bill when the items arrive
  • From the Vendors menu, select Enter Bills
  • From the Expenses tab, click on OCA account
  • Provide the amount of the prepayment as a negative value.
  • Add items under the Items
  • Click on Save & Close
• Pay the bill balance
  • From the Vendors menu, select Enter Bills
  • Choose the balance due once you apply for the prepayment and then click on Pay Selected Bills. After this, QuickBooks will create a Bill Payment Check for the balance.

To View Existing Payments

• From the Reports menu, click on Vendors & Payables > Vendor Balance Detail
• Click on Customize Report and then go to the Display tab
• Choose the date range for the report
• Now go to the Filters tab
• Click on Account from the list
• From the drop-down list, click on asset account created for tracking prepayment amounts.
• Click on OK

Reach Us For Support

By following the above two methods, you will be able to record prepayments or deposits for prepaid parts or services easily. However, there can be some situations when you may face some issues while doing the same. Because it is a complex process, it might be difficult to resolve the issue. In such cases, you can contact the technical support team of getsupportnumber.com. You just need to dial the toll-free QuickBooks Support Phone Number +1-866-701-7446 and the certified QuickBooks ProAdvisors will be connected to you on call to assist you.

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