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How to track your prepaid stock

by Intuit Updated 1 month ago

Learn how to track the items that you’ve paid but haven't received yet in QuickBooks Online.

You can record a payment to your supplier, without affecting the stock quantity on hand until you've received the items.

The following steps work well if you don't want to see a credit in Accounts Payable or when you want to separate prepaid stock from the stock asset account.

Step 1: Create a Purchase Order (PO) when the order is placed.

  1. Select + New.
  2. Select Purchase Order.
  3. Fill in the appropriate fields.
  4. Go to the Item details section, then enter the details of the product/service you are purchasing.
  5. Select Save.

Step 2: Write a cheque to the supplier then categorise the payment under a prepaid stock account.

  1. Select + New.
  2. Select Check.
  3. Select the supplier.
  4. In the Category details section, choose another current account such as Prepaid Stock then enter the amount of your payment.
  5. Select Save.

Step 3: When the stock is physically received, you can roll the PO to a bill for that supplier.

  1. Select + New.
  2. Select Bill.
  3. Select the name of the supplier.
    Note: When you select the supplier, any open purchase orders for that supplier will appear at the right side of your screen.
  4. Locate the purchase order you created then select Add Purchase Order.
  5. Select Save and close.

Step 4: On the previously written cheque, re-categorise the payment to Accounts Payable, which will create a credit for the Supplier.

  1. In the Cheque screen, change the Account to Accounts Payable (A/P) in the dropdown.
  2. Select Save and close.

Step 5: Finally, show the bill you created for your supplier as paid.

  1. Select + New.
  2. Select Check.
  3. Select the supplier from the dropdown list.
  4. Add the bill and the cheque you entered for the supplier.
  5. Select Save and close.
    Note: After adding, the bill appears under "Outstanding Transactions," and the cheque under "Credits."
Tip  Another way of tracking prepaid stock is to create a PO when the order is placed, enter a bill payment cheque, then establish a credit for the supplier. When the items are received, convert the PO to a bill then apply the previous bill payment to the bill.

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