Managing Pre-payments to Vendors in QuickBooks

QuickBooks 30-day free trial + 30% off for 12 months:



Excerpt from QB Power Hour Webinar from 02/19/2015.
Hector Garcia, CPA covers managing Prepayments to vendors using Checks, Credit Memos, BillPmt and Items that point to Prepaid Asset Account in QuickBooks Pro, Premier, or Enterprise.

00:00:00 Intro (Topics)
00:01:08 – Under what circumstances we will do vendor pre-payment (examples)
00:01:43 – Write checks
00:03:12 – Balance sheet
00:03:53 – Enter bills
00:04:45 – Unpaid bills detail
00:05:05 – Vendors (pay bills) (discount and credits)
00:06:05 – Duplicate checks (create 3 pre-payments) (pay bills) (discount and credits) (solution P.O reference) (example)
00:07:56 – Bill
00:09:43 – How to create a vendor credit (enter bills)
00:11:00 – Checking account
00:11:35 – Create a bill
00:12:08 – Vendors (pay bills) with P.O reference in the check and in the vendor credit (set credits) (assign check number) (manage pre-payments to future bills)
00:13:20 – How it works the bill payment-check technique (step by step)
00:16:23 – Prepaid item (how it works) (step by step)
00:17:55 – How to manage multiple pre-payments from vendors
00:18:18 – Reports (company & financial) (balance sheet standard)
00:19:08 – Top icon bar (customize icon bar) (view tab, add vendor prepayments to icon bar)
00:20:30 – Create vendor “x” bill (example)

[wmiller]

hector i watch your stuff all the time, very helpful. how do i receive and refund check from a vendor that was prepaid. i use the last method of prepayments

[yvonnegtz]

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

[jaycogswell]

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?

[dgeller]

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

[musacassataal]

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

[waheedlive_studio]

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 ???

[nschneider]

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

[isabelordonez]

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

[asgharrasool]

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

[SuperSharmin]

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

[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.

[akisistemas]

No puedo poner en cheques jobs los proveedores no salen ?

[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

[lorena]

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.

[lightrainbowclouds]

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

[shahidmalik]

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

[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]

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.

[waheedlive_studio]

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

[TheTruthSeeker]

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.