My firm has been recently added to Quick books on trail basis.
we have to make the advance payments for the suppliers and will receive the advance payment from my customers. The TDS need not be deducted for my suppliers as well as customers.
In the light of the above, how to make the advance payment to my Suppliers customers and also how to received the advance payments from the customers. Please guide and advise the necessary accounting entries in Quick books?
Hi, thanks for reaching out. For advance payment receipt from customer, you need to pass the 'Bank Deposit' entry and select the account 'Accounts Receivable (Debtors)' in account column and for making the advance payment to a vendor or supplier, please enter the expense form and select 'Accounts Payable (Creditors)" account column and enter the amount and all the necessary details.
You can make regular entry as made when payment or receipt happens in regular course of actions. Put narration for the advance being paid or received. The account balance of Vendors or customers will automatically show Debit Balance in case all previous balances are NIL.
Hi there, @chinmayvaidya7.
I'm here to provide another resolution on how to receive the customer's advance payment in QuickBooks Online that the Account Receivable will not be negative.
First, create a retainer or deposit which is treated as a liability and holds the deposit. When you invoice the customer and receive payment against it, you'll turn that liability into income.
Second, set up a non-inventory or service item for the retainer. Let me guide you how:
After that, create a memo or invoice that will be linked to the invoice you created. That way, the invoice will show as paid. Follow the steps below:
For detailed instructions, check out this article: Record a retainer or deposit.
You can always track the balance of the customer's retainer by opening the Balance Sheet. Then customize it to show the specific details.
For more information about recording the vendor's advance payment in QBO, visit these articles:
Feel free to leave a comment below if you have any other questions. Have a good day!