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Senior Explorer **

Vendor invoice paid in advance

Hello everyone

I have a question. I received an invoice for inventory items. Vendor request payment in advance..Now items been received and now I need to expense the invoice.. How can I reverse the prepaid to expense account?

 I have quicksbooks desktop pro



1 Comment
QuickBooks Team

Re: Vendor invoice paid in advance

It's good to have you back here in the Community, @geylicio.


You've got me here to share some information about handling advance payments in QuickBooks Desktop.


Did you entered the advance payment as a check? If so, you'll need to change the account type of the check so you can link it to an open bill. Let me guide you how:

  1. Locate the check that you've created.
  2. Go to the Expenses tab. In the Account column, enter Accounts Payable.
  3. Select Save & Close.

Once done, you can now enter the bill by going to the Vendors tab and selecting Enter Bills. Fill out the information needed then save it. After that, you can now apply the prepayment to the bill.


Here's how: 

  1. Go to the Vendors menu, then select Pay Bills.
  2. Highlight the bill you want to associate with the prepayment.
  3. Select Set Credits.
  4. The prepayment will display in the Set Credits screen. Make sure it is checked, then select Done.

For complete details about this process, please refer to this article: Record vendors' prepayments.


Also, here's a helpful resource that you can check out about allocating prepaid expenses for your future reference. 


However, if you've recorded it differently, could you please provide some details so I can provide you with the right resolution. 


I'll be keeping an eye out for the response on this. Have a good one.