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How to record a payment for a purchase order before the item is received

I send a vendor a purchase order. They require payment before they ship the items. I pay them by credit card. How can I enter the credit card charge without receiving the items in the purchase order?

 

Thanks!

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Re: How to record a payment for a purchase order before the item is received

I can provide some information on how to record vendor prepayments, Sambeaux.

 

In recording this scenario, you have two options for entering the prepayments or deposits.

 

First, you can use Accounts Payable to record prepayment by writing a check to your vendor which decreases the balance until you're ready to enter the final bill.

 

The other option, is to use an Asset account to track the prepayment by writing a check to the vendor which increases the balance until you are ready to pay the final bill.

 

However, I still suggest consulting your accounting professional to verify which options is best for you.

 

To give you a detailed information about this process, you can read this article: Record vendor prepayments or deposits for prepaid parts or services.

 

For additional help in the future, I'm attaching some helpful articles below:

Please keep me posted on how things go, I'm always here to ensure you'd able to record prepayment transaction. Have a great day!

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