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Charles284
January 4, 2024
Question

How to record Advance payment to vendor

  • January 4, 2024
  • 1 reply
  • 0 views

Hello, I made an advance payment to a vendor in December to secure a booking for travel  in January. The invoice was received, charged to travel expense and paid. However, given that the expense will be incurred in January what is the appropriate way to record this? Thanks.

1 reply

Rainflurry
Rainflurry
January 4, 2024

@Charles284 

 

It depends on a number of factors.  Are you on cash or accrual basis?  Are you asking from a tax perspective or just how to record it in QB?  Is the amount significant?  Did you pay the entire amount or is this a deposit?

 

 

K
KimberlyS
January 4, 2024

I appreciate you posting your concern here in the forum, @Charles284.

 

I'll ensure you can record your advance payment accordingly in QuickBooks Online.

 

Using the Expense feature, you can record the advance payment for your vendor and set it as an Accounts Payable.

 

Here's how:

 

  1. Head to the +New button.
  2. Choose the Expense option.
  3. Pick a Payee and Payment account.
  4. Proceed to the Category details section.
  5. Pick Accounts Payable (A/P) under the Category column.
  6. Indicate that it's an advance payment in the Description column.
  7. Enter the amount in the Amount column.
  8. Once done, select Save and close.

 

For more information about managing your expense transactions and creating further changes, please visit this page: Enter and manage expenses in QuickBooks Online.

 

Moreover, consider running and customizing a report to have an overview of how your business is doing financially. This will help you make informed decisions to ensure your business is on the right track.

 

Keep us posted if you have additional questions about recording vendor payments or other related concerns in QuickBooks Online. We're here to help.

S
shortcut1
June 13, 2024

This does NOT work.

 

I'm trying to use these instructions to enter an advance payment to a vendor ;  however, to enter to an EXPENSE you have to select a Tax Rate, and you will also get an error that states ' you cannot track tax on accounts type Accounts Receivable and Accounts Payable

 

I've entered it as a Journal Entry

Debit Accounts Payable account, and choose the vendor under ' Name" 

The credit bank account.

 

Credit amount is now sitting on Vendor to be applied against Invoice when the goods are received.

 

 

 

 

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