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Track prepaid stock in QuickBooks

by Intuit•2• Updated 3 days ago

Learn how to record payments for stock you’ve paid for but not yet received in QuickBooks Online.

You can pay a supplier before stock arrives without affecting your stock on hand. These steps also work if you want to avoid showing a supplier credit in Accounts Payable or if you prefer to keep prepaid stock separate from your stock asset account.

QUICK TIP: You can also track prepaid stock by creating a purchase order, recording a bill payment cheque to establish a supplier credit, then converting the purchase order to a bill when the stock arrives. You can then apply the supplier credit to the bill.

Record the order when you place it with your supplier.

  1. Select + New or + Create.
  2. Select Purchase Order.
  3. Enter the supplier and product details in the relevant fields.
  4. Go to the Item details section and add the products or services you are purchasing.
  5. Select Save.

Create a cheque for the prepaid amount and categorise it under a prepaid stock account.

  1. Select + New or + Create.
  2. Select Cheque.
  3. Select the supplier.
  4. In the Category details section, select an account such as Prepaid stock.
  5. Enter the payment amount.
  6. Select Save.

When the stock is delivered, create a bill from the purchase order.

  1. Select + New or + Create.
  2. Select Bill.
  3. Select the supplier.
  4. Review the purchase order details that appear on the right and select Add purchase order.
  5. Select Save and close.

Update the original cheque so it links to the supplier’s Accounts Payable.

  1. Open the cheque.
  2. In the Category details section, change the account to Accounts payable (A/P).
  3. Select Save and close.

Link the supplier bill and the prepaid cheque so the bill shows as paid.

  1. Select + New or + Create.
  2. Select Cheque.
  3. Select the supplier.
  4. In the supplier’s transactions, add both the bill and the prepaid cheque.
  5. Select Save and close.

The bill will now appear under Outstanding transactions and the cheque under Credits.


What's next?

Here are some more resources to help you manage stock and supplier transactions in QuickBooks Online:

QuickBooks Online EssentialsQuickBooks Online PlusQuickBooks Online Simple Start