Commerce & QBO Purchase Order Processing

lynne-turn-erin- · ‎February 01, 2022

We use Commerce to produce purchase orders, and QBO to pay for those purchase orders. What are the accounting entries that flow through QBO for purchase orders created in Commerce?

-We have purchase orders in Commerce which are in Active status, as the inventory has not yet been received. At what point does QBO create an entry? And what is that entry? (Debit Prepaid Inventory/Credit A/P?)

-It looks like the entry is created when the inventory is received. If that's correct, how does QBO handle partial receipt of inventory? Will it create an entry for just the portion that has been received?

-What transaction date is used once QBO creates an entry?

-If it's true that QBO only recognizes purchase orders that have been "received", then what's the best way to handle pre-payment of these purchase orders? We generally have to pay for the inventory before it's received, so going through the normal process to "Pay Bills" and select the purchase order doesn't work, because the purchase order is usually not in QBO yet.

Jovychris_A · ‎February 01, 2022

Hi @lynne-turn-erin-. Let me answer your questions.

At this time, QuickBooks Online (QBO) only manages your income and expenses for accounting. It will give you a view of your overall business performance and help you ready, like tax time.

Purchase orders are non-posting entries. Therefore this won't show accounting entries in QBO. Purchase orders in QBO are associated with bills, once it is paid partially or fully, it will record the amounts to the allocated accounts.

On the other hand, QBO only creates entries when they are received. It will also create an entry for partial inventory receipts.

And since you generally have to pay for the inventory before it's received, you'll want to create a bill or create an expense in QBO. Recording this type of transaction will account for the quantity and amount of the inventory items.

I'm adding this article for more details about how QuickBooks integrates with Commerce: Getting started with QuickBooks Commerce (when you have existing products in QBO).

In addition, you can take this article as well for more details about inventory management: Add inventory products in QuickBooks Online.

Please let me know if you have additional questions about the integrations and how to record your financial data in QBO. I'm always here to help. Stay safe and well!

Topics

Training

Community

Resources

Commerce & QBO Purchase Order Processing

Commerce & QBO Purchase Order Processing

Need to get in touch?