We purchase product overseas that we put in our local inventory. From order to receive product can take up to 3 months. Each order means partial money down then remaining amount paid when it ships. Which means we have paid for the product before we receive it. Also, to avoid incurring multiple wire transfer fees a wire transfer might be made that is applicable to multiple POs (for exp deposit for 2nd order and remaining due on 1st order so 1 payment tied to different purchase orders ).
For inventory purposes I am creating a PO... But how do I apply funds paid to the vendor so that the PO eventually closes out. And how will inventory look once it's figured out how to reflect my payment to the vendor since the product is paid for before it's received.
This one big issue is affecting me balancing my busines bank acct and reflect inventory accurately.
Here is a real life example. I order 2000 pieces of a product. 200 of them will be air freighted and remaining shipped on boat. To manage this I took the $40,000 order and created two POs so that I could manage when they are received.
A wire transfer was initiated for $40,000 in May. This was the deposit for the two POs I created (200 / 1800 items) and the remaining due for a 3rd PO. How do I apply the $40,000 to these 3 different PO's?
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A PO is non posting, it is just a memo of what you have ordered. From what you describe I too would have used two PO's.
Entering the bill is what stocks inventory.
When you enter the 40K payment, make that payment to the vendor and use accounts payable as the expense (reason) for the payment. That sets a credit with the vendor, which can then be applied to any bill from that vendor, it is not tied to a specific PO.
When the shipment comes in, create the bill from the PO, get all items listed with qty and total cost per item, save and in pay bills, apply the credit.
Thank you! So, I had tried this before but where I am getting stuck is that it isn't giving me an opportunity to apply the funds sitting in accounts payable to the bill.
I entered the bill by using the PO against the bill. Then I went to pay bills. I select the bill I want to pay. It gives me a pop up message "a check will not be created for this bill because it will be paid entirely with credits and/or discounts." I select ok. However, down at the bottom where it has the credits but then also payment section. If I click pay selected bills, it is still recording a transaction to my credit card as payment even though I didn't want to. Is there something I am not selecting?
One more thing I will add is when going to my chart of accounts and that credit card it states "QuickBooks generated zero amount transaction for bill payment stub" The charge is 0 and did not change the balance on that chart of account........so technically it didn't change anything but it looks weird