I prepaid to vendors two month before I receive my customer's payments.
How to do accounting correctly when I prepaid to vendors? Now I use "BILL" as account payable & "BILL PAYMENT" (when I remit to vendors). I also use "INVOICE" as an account receivable and send to customers for them to pay in certain date (two month after I pay to vendors).
However, here is the issues I have:
1. Some transaction go to "PURCHASE" category in the "Profit & Loss Sheet"
2. The Cost of Good Sold & sales income is in different month so I can't track the profit for each estimate vs purchase order.
3. Is there an accounting category that I can use for prepaying vendors so I can balance it after I receive money from Customers.
4. IF above point 3 can happen, how can I track the money I owe vendors or the money that customers need to pay me.
Cheers,
Jaco