We have prepaid a suppliers bill. Two months later, the goods arrived, so entered the bill to update inventory. How to show the payment against the Bill?

davidb-abs-pl-co · ‎December 21, 2022

The prepayment was entered as a supplier expense to record the payment.
The bill has now been entered to update the inventory level.
We have the payment showing as an expense, and the bill showing as unpaid (but at least the inventory is correct!)

Rustler · ‎December 21, 2022

It can not be an expense and inventory, which is an asset.

Think of it from the vendors point of view, you prepaid and that set a customer credit. The vendor owes you what you paid for.

So on your side of things, you should enter a prepayment as a vendor credit.

Find the original transaction, change the expense account to accounts payable and select the vendor name. That sets a vendor credit.

Then enter the bill for inventory using the item details part of the bill. When you are done entering inventory save and use pay bills, select this bill and click apply credits to pay it.

View solution in original post

Rustler · ‎December 21, 2022

It can not be an expense and inventory, which is an asset.

Think of it from the vendors point of view, you prepaid and that set a customer credit. The vendor owes you what you paid for.

So on your side of things, you should enter a prepayment as a vendor credit.

Find the original transaction, change the expense account to accounts payable and select the vendor name. That sets a vendor credit.

Then enter the bill for inventory using the item details part of the bill. When you are done entering inventory save and use pay bills, select this bill and click apply credits to pay it.

davidb-abs-pl-co · ‎December 21, 2022

Thank you - makes perfect sense! Much appreciated!!!

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We have prepaid a suppliers bill. Two months later, the goods arrived, so entered the bill to update inventory. How to show the payment against the Bill?