Pre-paying for inventory and taking customer deposits

Hello there, @Need2Learn. Welcome to QuickBooks Community!

I appreciate you for adding more and enough details of your concern. To handle the pre-payment for inventory, you can use Accounts Payable to record prepayment. You can write a check to the vendor and record it to your Accounts Payable (A/P) account. It'll decrease the balance. Here's how:

Create a check for the vendor by going to the Banking menu. Here's how:

1. From the Banking menu, select Write Checks.
2. Enter the vendor name, date, and payment amount.
3. Go to the Expenses tab. In the Account column, enter Accounts Payable.
4. In the Customer: Job column, select the drop-down, then choose the vendor name.
5. Select Save & Close.

Once done, enter a bill. Then, apply the prepayment to a bill. Here are the steps on how to do it:

1. Go to the Vendors menu, then select Pay Bills.
2. Highlight the bill you want to associate with the prepayment.
3. Select Set Credits.
4. The prepayment will display on the Set Credits screen. Make sure it is checked, then select Done.
5. Note: If there is a balance due on the bill, QuickBooks will create a Bill Payment Check.

For the paid inventory from your customer, you can create a credit memo to be included in the inventory count.

1. Choose the Customers→Create Credit Memos/Refunds command to display the Create Credit Memos/Refunds window.
2. Identify the customer, or the customer and the job, in the Customer: Job box.
   

You can refer to these articles if you have questions about the credit memo and recording prepayments:

• Record vendor prepayments or deposits for prepaid parts or services.
• Credit memo

Let me know if you need additional assistance. I'll be around to help with further. Take care always.

Hi Need2Learn,

Hope you’re doing great. I wanted to see how everything is going about handling pre-payment inventory items and the ones that are already paid by your customer. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at anytime.

Looking forward to your reply. Have a pleasant day ahead!