DEPOSIT – PREPAYMENT ON A PURCHASE ORDER

Deposit/Prepayment on a Vendor Purchase Order:
Write a check or a wire transfer to a vendor before receipt of the bill.

Pay by Check:
1. Insert a GL Asset Account (1000 series) called Vendor Prepayments, Advance Payments, Payable Prepayments, or something like that.
If you make prepayments often to different vendors, you may want to insert a separate GL Account for each vendor. Once the account is set up you do not need to do it again.

2. Write the Check against this account, and on your PO put a note referencing the check number and date paid.

3. To see checks written as a prepayment go to the Vendor window and click Lists > Checks.
Or look at the Ledger history for the prepayment GL account. (Ledger > Account Categories > Detail History).

4. Optional: On the Vendor window enter a Warning Message: Prepaid $ xxx with check # YYY

5. When the Bill arrives from the vendor, enter it in the Payables window and click OK.
Then click Adjust A/P, and enter the amount of the prepayment in the Credit amount and Applied fields, and offset it against the Advance Payments account.

Pay by Wire:
1. Insert a GL Asset Account (1000 series) called Vendor Prepayments, Advance Payments, Payable Prepayments, or something like that.
If you make prepayments often to different vendors, you may want to insert a separate GL Account for each vendor. Once the account is set up you do not need to do it again.

2. Menus > Checks/Payables > Transactions > Decrease Cash in Bank.
Enter the offset account that you set up in step #1.

3. To see wires written as a prepayment go to the Vendor window and click Lists > Checks.
The payment will show as Check #0.
Or look at the Ledger history for the prepayment GL account. (Ledger > Account Categories > Detail History).

4. Optional: On the Vendor window enter a Warning Message: Prepaid $ xxx by Wire.