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J
Jmontes77029
September 18, 2024
Question

Inventory Purchases Using Affirm

  • September 18, 2024
  • 1 reply
  • 0 views

I purchase some inventory to sell with an Affirm payment plan. How would I record the inventory purchase when purchasing with Affirm. There is some interest that will also be charged depending on how long it takes to pay off Affirm. Also, I use the accrual accounting method for COGS. I typically purchase all my inventory with my business debit card but in this case I used Affirm so I am not sure how to record this properly. 

1 reply

R
Rasa-LilaM
September 18, 2024

Keeping accurate records of your inventory purchases is important to your business's financial success and smooth operations, Jmontes77029. Let's connect you with the appropriate support to get guidance on how to accurately account for the transactions.

 

We'll have to create a journal entry to record the inventory purchase, interest expense, and payments. I suggest contacting your accountant for advice on which accounts to use for the debits and credits for each transaction type.

 

When you have the information handy, follow these steps to record the entries:

 

  1. In QuickBooks Online (QBO), navigate to the New menu in the upper right and select Journal entry under Other.
  2. On the entry screen, enter the correct date in the Journal date field and the transaction number in the Journal no. field.
  3. In the Account column, go to the first line and enter the correct category. Enter the amount in the designated column according to whether you're debiting or crediting the account.
  4. Navigate to the next line, and select the other account you're moving money to or from. Depending on whether the first line shows a debit or credit, enter the same amount in the corresponding opposite column.
  5. Review the totals and check that the amounts in the Credit column and Debit column are equal.
  6. Click the Save and new or Save and close button.

For visual reference and other information about the process, check out this article: Create journal entries in QuickBooks Online.

 

Additionally, check out these resources for further information on debits and credits, along with tips for managing prepaid inventory:

Moreover, explore the QuickBooks Live Expert Assisted service. Our team of experts can help you automate QuickBooks based on what your business needs. They can provide guidance and answer your questions on categorizing transactions, reconciling accounts, reviewing important reports, and managing workflows.

 

If you require additional help managing your inventory items, and transactions, or completing a particular accounting task, visit the Community again. We're always here to offer our support and assistance.

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