Ours is a VERY small mom-and-pop home-based business. We have had to file and extension for our 2018 income reporting. Because I am behind with 2018, I am simultaneously recording sales and expenses in QBO for past date 2018 AND 2019 to at least keep this year current.
INVENTORY ORDER and PAYMENTS:
I ordered inventory in May 2018 and wired a prepaid deposit to our vendor. I made a 2nd pre-payment in June when the product was ready to ship. The balance due was wired in July.
I ordered a total of 2022 units spread over 3 SKUs. The vendor invoice is dated 6/28/2018 for total due of $27,411.34. The shipment was received the last week in July, 2018.
SKU1 (totaling $16,972.20) still had plenty of inventory in QB from a prior order. Since I was trying to get a handle on FIFO processing, I DID NOT receive those into QB inventory. :-(
The other 2 SKUs ( totaling $10,264.14) were NEW products (0 on hand). Because I we were holding advance orders and wanted to start selling them, I ENTERED THEM BOTH DIRECTLY in QBO Poducts & Svcs, complete with the new quantities and both sales prices and costs were entered as well as the appropriate income and COGS accounts.
FAST FORWARD to April, 2019. After studying for months and watching many YouTube tutorials, today I entered the first two wired prepayments (dated 5/11/18 for $8,223.40 and 6/25/18 for $8,650.00). I used "write check" and saved to Accounts Payable for customer: Prepaid Vendor.
I then created a PO dated 6/28/2018 and listed only SKU1 and 2 non-inventory items. The total on the PO is $17,147.20. I have not yet created a bill or posted the final payment made 7/12/2018.
QUESTION: What do I do in QBO (step-by-step, with account types where appropriate, please) to create the bill, post the vendor payments, ending with $0 balance to vendor and $0 balance in Accounts Payable and no inventory product duplicated in the inventory asset account? I would like to create one bill with total due, post first two prepayment credits and pay bill with last wire payment if that will work. (Btw: I never could find a tab called "set credits.")
I sounds like you are trying to retroactively correct your book - which is fine and good. In general the best way to make entries in QB is to copy the documents and transactions as they actually happen in the real world. Your getting there ...
Your posting of vendor prepayments as checks into AP for Prepaid Vendor is fine - provided thats the same vendor record as the PO and bill later.
You seem to realize that all the items you physically bought and sold should be inventory type, but you seem reluctant to make that correction - not sure why? If you have been dealing in those for some time as non-inventory items then the thing to do is create new inventory type items (with a slightly different number&name) then transition to buying and selling those items and abandon using the old ones.
The vendor PO & bill should be made as it reads - 3 items with qnty & price. These would be inventory items. Then the subsequent customer invoices would have to start using these same (new) items. Maybe this is the problem that you have a bunch of existing invoices you don't want to change?
Once the vendor bill is posted you go into "pay bills" and once you pick the vendor bill that needs paid you will able to 'apply credits' - but you have to get to that step. Note that the PO has to be converted to a Bill - you cant pay POs, only bills.
I can't put the "new" SKUs on the PO and bring into the vendor bill because the transaction processing would add them a second time to my inventory and erroneously increase my inventory asset balance. I already put those 2 parts of the April, 2018, order into inventory on 9/01/2018 after they were received. I ordered at the same time and received a 3rd SKU that I have yet to add to catch up my 2018 delivery.
I think the easiest way to do this is just to add my final payment to the vendor to accounts payable as I did the other pre-payments.
Now my questions are these:
1. How do I get the remaining SKU quantities and cost into inventory where the product already exists because I had ordered it in the past? Do I just go into that product and make a quantity adjustment for 1260 units dated 9/02/2018?
2. If I do that, do I use Category Details on the vendor bill and then Accounts Payable as the Account and the exact amount of the entire vendor invoice? Then how do I apply the prepayments to the bill to clear Accts Payable and the Bill?
Unfortunately none of my pre-payments exactly match the cost totals for either the 2 SKUs I entered last year or the 1260 units of the SKU I am trying to put in now.
Also, I have too many sales entered of the 2 "new" SKUs to just delete them all, make an inventory adjustment back to 0 for them and start all over with a total shipment PO to bring into a bill (as I will do henceforth). Then enter all of the sales again. :-( I sure hope that is not my only option.