Vendor deposit and applying to bills

Hi there, @dranta. I've got some information you need in handling payments to vendors in QuickBooks Online (QBO). 

When making payments to the vendor, you'll have to use Accounts Payable as the expense (reason) for the payment. That will set a vendor credit that you can apply to the bill when it comes in, and pay the balance due. So to record the payment, you'll have first to create a new expense under that vendor. 

Here's how:
 

1. In the left menu, click the + New button.
2. Select Expense.
3. Choose the Payee name and Payment account.
4. Go to the Category details section.
5. Under the Category column, select Accounts Payable (A/P).
6. Enter the description and the amount.
7. Click Save and close.

Then, enter the bill when it arrives and apply the prepayment. See this link for more information: Enter bills and record bill payments in QuickBooks Online.

I see that one of the payments was not made directly to the vendor. Can you tell me more about it? Did you pay your vendor manually? This way, I'd be able to give you an accurate resolution on how to handle this.

 I've also included these references that help you manage your expenses and vendors: 
 

• Enter and manage bills and bill payments in QuickBooks Online.
• Enter expenses, pay bills, write checks, and manage suppliers. 
   

The Community is always here if you have additional questions about vendor deposits in QuickBooks Online. Have a great day!

Thank you.  Yes I was able to do as you mentioned but the problem is that one of the payments made was to our CEO as we did not have an account set up yet.  So now I paid our CEO $4500 to repay him for this expense but I would like it to show up on our vendor account because we will still have a credit after all is said and done.  Can I do this by a journal entry?

I appreciate you for getting back to us, dranta.

Yes, you can create a journal entry to transfer between funds. However, to ensure that the transactions are recorded correctly, I'd suggest reaching out to your accountant. They're the best support that can guide you with the process.

I've added this reference as your guide in creating a journal entry: Create journal entries.

I'm just a post-away whenever you have concerns with QuickBooks.

Oh no, this is a huge amount of money. Really hoping this type of problem does not occur to you ever again.

Thank you!!!!  That is the answer I needed.  I appreciate it!

We made vendor deposits and posted to asset account in March.  Now in April I have the invoices posted that I want to apply this deposit to.  When I apply the deposit to the invoices the original entry to the asset acct is now gone and that doesn't work seeing it changes a closed month.  There has to be a work around.  I would think the asset account should show the dep in March and it moving out in April.  I dont want my March bal sht to change.  Help pls.

Hello there. 

I'm glad you joined this thread and shared the details of your concern with posting your transactions. I've got some insights that can help you sort this out. 

We can create a vendor credit with the same amount of the vendor deposit posted to your asset account, but since you mentioned that your books for March are closed, we can use the Journal Entry. Once ready, here's how:

1. Click + New and select Journal entry.
2. On the first line, select an account from the Account field. It depends if you need to debit or credit the account. Enter the amount in the correct column.
3. On the following line, select the other account you're moving money to or from. It depends if you entered a debit or credit on the first line. Enter the same amount in the opposite column.
4. Review the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. It means the accounts are in balance.
5. Enter information in the memo to know why you made the journal entry.
6. Hit Save and new or Save and close.

However, this process is a bit tricky. We'll want to seek an accountant's advice to ensure the accuracy of your books. 

Here's an article you can visit to learn more about recording journal entries: Create journal entries in QuickBooks Online.

If you need help closing out your books after making the corrections, I'll add this article: Reconcile an account in QuickBooks Online. 

Let me know how else I can help you balance your accounts or transactions. I'll be around to help you.

Not sure you understood the question.  I figured out that I need to create a vendor credit for the same amount of the deposit that was posted to the Other Asset acct in prior month.  Post this credit to this account also.  Then go to vendor, make payment and apply the credit to invoices.  I wouldn't want to create JE's for this.  

Hi there, whatever12345.

I appreciate you for coming back to the thread and for sharing some information on how to fix your deposit issue and post it to a particular account. I'm also glad to know that the issue has been resolved as a result of the procedures you performed.

Please know that you are always welcome to click the Reply button below if you still have concerns about managing entries in QBO. I'm always around to help, whatever12345.