PrePaid Purchases

SUGGESTED

Good day

First post here. Hoping I can find some clarity here (have basic bookkeeping experience).

Company has to pay a supplier a deposit when placing an order for a product.

The product will be delivered about 3 weeks later. It will be installed at customer's address about a month after being received in store.

About 2 weeks after installation, the customer will be invoiced.

Business owner wants the prepaid purchases deposit and the customer sales invoice to be in recorded in the same month (so that his Profit & Loss doesn't look messed up).

How would I record this whole process, given the time between each step?

Thanks so much. 

Al

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    SUGGESTED

    Hi Al - you could just post the payment to the supplier in the payment journal without recording the invoice - it will show as a negative balance in the supplier's acccount but that only affects the Balance Sheet - it will not affect the P&L Stmt.

    When the supplier invoice comes you will post it as a Pay Later for the full amount. When paying it in the Payment module it will show the supplier invoice along with the deposit amount - you would select both to pay the supplier invoice.

    Hope that makes sense to you?

    Heather

Reply
  • 0
    SUGGESTED

    Hi Al - you could just post the payment to the supplier in the payment journal without recording the invoice - it will show as a negative balance in the supplier's acccount but that only affects the Balance Sheet - it will not affect the P&L Stmt.

    When the supplier invoice comes you will post it as a Pay Later for the full amount. When paying it in the Payment module it will show the supplier invoice along with the deposit amount - you would select both to pay the supplier invoice.

    Hope that makes sense to you?

    Heather

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