How to record a vehicle purchase with multiple payments - Car Dealer

I know a way how you can make multiple payments on your purchase orders, rosegolf. I'm here to help you with the process.

QuickBooks Online lets you record multiple payments. You just need to manually edit the amount once the purchase order is added to the bill. I'll show you how:

1. Click + New in the left panel and choose Bill.
2. At the top left, select a Vendor.
3. When the Purchase Orders section appears on the right-hand side of the screen, click Add on that purchase order.
4. Update the amount you paid.
5. Repeat the process for all the payments.

Once all amounts on the purchase order are accounted for across all of its linked transactions, it'll be automatically closed.

As for categorizing these transactions, I'd suggest consulting your accountant to guide you with the process. If you don't have one, you can use our Find-an-Accountant tool to look for an expert near you.

Additionally, I've included an article that'll help you in managing your vendor transactions in QuickBooks Online. This ensures your record is accurate: Manage Expenses.

I'm only a few clicks away if you need assistance with your other QuickBooks tasks, rosegolf. It's always my pleasure to help you out again.

Thanks for your quick response.

I guess I was recording multiple payments correctly, but my inventory asset account isn't registering correctly.

For example, I bought a car on April 13, 2021 for $37,900. I paid via cashier check for $26,068.04 to the lender to payoff the car and I paid the difference of $11,831.96 to the seller via cashier check. The problem is after I created a sales receipt on April 26, 2021, the register only deducts the inventory by $26,068.04 when it should be deducting the full purchase price of $37,900. I've attached a screenshot so you can see it.

How do I solve this issue?

Thanks!

Thank you for responding, rosegolf.

I appreciate the details and screenshot you've shared with us about this concern. Let me share some information about handling inventory assets in QuickBooks Online.

When recording an inventory asset that you purchased, you'll need to create bill to associate it with your expenses. This will debit the item's inventory asset account and credit your A/P accounts.

Also, the functionality of the sales receipt won't affect the inventory asset accounts. That said, you can delete the sales receipt and follow the steps given by colleague in creating a bill. Here's an article for more information: Enter bills and record bill payments in QuickBooks Online.

You can check out this link for more tips and guides in managing expense and vendors in QuickBooks Online.

Feel free to post or leave a comment below for any follow-up questions about expenses. Enjoy the rest your day!

Thanks for the response. However, adding a bill does not make sense to me because I've already paid for the inventory item and categorized the payment as an inventory asset under transactions with my linked checking account. Also, I do want to use sales receipts as it's valuable to my reporting. 

It is incorrect that the sales receipt won't affect the inventory asset account and the screenshot I submitted shows that. The inventory asset deducted $26,068.04, but it did not deduct the other payment of $11,831.96 after the sales receipt was created. 

Please advise. 

Hi there, @rosegolf.

To clarify, do you intend to sell the car? Inventory assets are goods or items you buy and/or sell that a company plans to sell. In QuickBooks Online (QBO), you can create an asset account to track the current value and depreciation of your vehicle. Before doing this process, I'd suggest deleting the expenses and the sales receipt you've created for the inventory asset.

Here's how to create a Vehicle asset account:

1. Go to the Gear icon, then select Chart of Accounts.
2. Select New.
3. From the Account Type dropdown, select Fixed Assets.
4. From the Detail Type dropdown, select Vehicle.
5. Name the account, then select the Track depreciation of this asset checkbox.
6. Enter the current value of your asset in the Original cost field and the as of date. If recording the loan, leave this blank. In your case, leave this field blank.
7. When you're done, select Save and Close.

Then, create a purchase order for the vehicle.

1. Select + New.
2. Select Purchase order.
3. From the Vendor dropdown, select the vendor.
4. Review the Mailing address.
5. If you are shipping the products directly to a customer, select the Ship to drop down and then Ship via. Check the Shipping address to make sure it's correct.
6. Enter the Purchase Order date.
7. In the Category details section, select the Vehicle asset account.
8. Enter the amount of $37,900.
9. When you're done, select Save and close. 

After that, add the purchase order to expenses or checks.

1. Select + New.
2. Select Expense or Checks.
3. From the Payee dropdown, select the vendor. This opens a window with their open purchase orders.
4. Select Add for the correct purchase order. This adds the items from the purchase order. They appear in the Category details section.
5. Edit the amount and enter $26,068.04.
6. Select Save and close.

Lastly, create an expense or check again for the amount of $11,831.96. Make sure to select the purchase order you created. After you set up your assets, you can record their depreciation using journal entries.

I'm always here if you need more help with recording your purchases. It's my pleasure to help you succeed. Have a good one.

Thank you. That solved it for me!

Hi there, @Rainflurry.

We appreciate you taking the time helping other users in the Community. Take care always and enjoy the rest of the day.