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PO line item for Savings Account

Forum|Forum|3 years ago
December 13, 2022
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The company I order my inventory from recently started a sponsored savings account. Basically, for every "Widget A" I order, they charge an extra $10 that goes into a company savings account for me. I am able to use the money I deposited for company functions, conferences, supplies, etc.. No interest is accrued on the account; what I put into it is what I have, no more, no less.

I am not sure how to enter this extra charge on the PO into my QB. Because of the type of account it is, I would like to track the contribution to the account, and expense out the withdrawals. I am using company money to fund the account so it would not be considered a member contribution.

Any help or guidance is greatly appreciated.

QuickBooks Desktop

Best answer by RitelloHS

Since I didn't get an updated response, I ended up reaching out to my accountant. I figured I would post the solution:

First, add a new "Other Current Asset" account. Name the account as you wish. Tax line mapping was also marked as Other Current Asset.

Next, I added a new item - categorized as "Other Charge". I labeled the new item Company Savings Account. When setting up the new item, add the extra charge, and choose the account that you set up in the first step.

Now, when I create a PO, I can add that item to the PO. I "receive items and enter bill" against the PO. When I pay the bill using my credit card, the Company Savings Account is credited the extra charge(s) from the PO. My Company Savings Account deposits are being tracked, and when I use money from that account to purchase items, I can expense the purchase using the correct tax line mapping.

The solution turned out to be surprisingly simple, but for the life of me, I couldn't wrap my head around it. I am hoping that posting this may help someone else in the future.

C

Charies_M

Gooday, RitelloHS.

You'll want to create an item for the extra charge then add this in your Purchase Order (PO).

Here's how to create an item:

Go to Lists, then select Item List (for Windows) or Items (for Mac).
Select Item then New (for Windows) or plus + (for Mac), then select New Item.
Select the type of item you want to create.
Fill out the item fields.
Use Custom Fields to add your own customized fields.
Select Save.

I'm sharing this link to the article about managing items in QuickBooks: Add, edit, and delete items

Once done, you can create a Purchase Order (PO) and add the newly created item for extra charge. I'll guide you through the process:

Create a PO by going to Vendors and choose to Create Purchase Orders.
Enter the necessary information including the 10 items.
Click Save.

Let me know if you have other questions while working with purchase orders. I'm here to further assist. Have a lovely day ahead.

R

RitelloHSAuthor

I am confused still about how to create the new item. I understand the mechanics of creating the new item, but I am not sure how I should categorize the item. Even though I am being charged the extra $10 per widget, it is not an expense because that money is basically being "transferred" to a company savings account. I need to track the amount "transferred" to this company savings account so that when I purchase inventory, supplies, etc., I can expense it out of that account at that time.

My apologies if I am not doing a good job explaining what I am trying to accomplish, so I am going to give an example.

I create a PO for 10 widgets @ $100 each

The PO has two line items: 1). 10x widgets @ $100 - $1000, and 2). 10x Company Savings Account @ $10 - $100. The total for PO is $1100.

When I am invoiced, I am charged $1100 (this is the amount that is charged on my credit card), however, $100 of the charge is moved into the company savings account so it is not considered an expense (yet) even though funds were withdrawn from my account.

Now let's say a week later I contact the company to order 1x widget for $100. Instead of using my credit card, I use the $100 in my "savings" account to pay for the widget. The invoice I receive from the company will show a $0 balance because the funds from the savings account were used instead of my CC. In this case, I still need to create a PO in my QB so I can receive the widget into my inventory and expense the cost. But now, instead of using my CC to pay the invoice, I will deduct the funds from the savings account.

On my QB, I want to keep track of this company savings account. Each time I pay the $10/widget, a deposit into the savings account will go on the ledger. When I use the funds from the account to purchase items, I will deduct them from the savings account ledger; this will also expense the funds properly as the items purchased using those funds varies and therefore may fall under different expense categories.

Hope that adds a little more clarity to what I am trying to accomplish. Thank you in advance for any help.

R

RitelloHSAuthorAnswer

Since I didn't get an updated response, I ended up reaching out to my accountant. I figured I would post the solution:

First, add a new "Other Current Asset" account. Name the account as you wish. Tax line mapping was also marked as Other Current Asset.

Next, I added a new item - categorized as "Other Charge". I labeled the new item Company Savings Account. When setting up the new item, add the extra charge, and choose the account that you set up in the first step.

Now, when I create a PO, I can add that item to the PO. I "receive items and enter bill" against the PO. When I pay the bill using my credit card, the Company Savings Account is credited the extra charge(s) from the PO. My Company Savings Account deposits are being tracked, and when I use money from that account to purchase items, I can expense the purchase using the correct tax line mapping.

The solution turned out to be surprisingly simple, but for the life of me, I couldn't wrap my head around it. I am hoping that posting this may help someone else in the future.

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