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rosegolf
February 5, 2022
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How to record a vehicle purchase with multiple payments - Car Dealer

  • February 5, 2022
  • 1 reply
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Hi - I run a used a car dealership and am using Quickbooks online inventory feature. It is fairly often that I purchase a car with two separate cashier checks. 

 

For example, let's say the purchase price was $39k, I paid a $500 deposit to the seller to secure the car and paid the remaining $38,500 upon pickup. Another example is when I buy a car from a private party and payoff their loan. For example, let's say the purchase price is $25k, I paid $20k to the lender to payoff the car and the remaining $5k to the seller for the difference between the selling price and the payoff amount. 

 

How do I categorize these two separate transactions as the same purchase price? 

 

 

Best answer by Rainflurry

Thanks for the response. However, adding a bill does not make sense to me because I've already paid for the inventory item and categorized the payment as an inventory asset under transactions with my linked checking account. Also, I do want to use sales receipts as it's valuable to my reporting. 

 

It is incorrect that the sales receipt won't affect the inventory asset account and the screenshot I submitted shows that. The inventory asset deducted $26,068.04, but it did not deduct the other payment of $11,831.96 after the sales receipt was created. 

 

Please advise. 


@rosegolf 

 

You will need to create a bill and record the two payments against it. 

 

Set up an inventory item "Stock #11", in this case, and record the price you paid for the vehicle as the item's cost.  Then, create a bill for the item to receive it into inventory.  Make the two payments against the bill.  Use a sales receipt (selecting Stock #11 for the Product/Service) when you sell the vehicle and all will be right with the world.  

1 reply

C
CharleneMaeF
February 5, 2022

I know a way how you can make multiple payments on your purchase orders, rosegolf. I'm here to help you with the process.

 

QuickBooks Online lets you record multiple payments. You just need to manually edit the amount once the purchase order is added to the bill. I'll show you how:

 

  1. Click + New in the left panel and choose Bill.
  2. At the top left, select a Vendor.
  3. When the Purchase Orders section appears on the right-hand side of the screen, click Add on that purchase order.
  4. Update the amount you paid.
  5. Repeat the process for all the payments.

 

Once all amounts on the purchase order are accounted for across all of its linked transactions, it'll be automatically closed.

 

As for categorizing these transactions, I'd suggest consulting your accountant to guide you with the process. If you don't have one, you can use our Find-an-Accountant tool to look for an expert near you.

 

Additionally, I've included an article that'll help you in managing your vendor transactions in QuickBooks Online. This ensures your record is accurate: Manage Expenses.

 

I'm only a few clicks away if you need assistance with your other QuickBooks tasks, rosegolf. It's always my pleasure to help you out again.

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rosegolfAuthor
February 6, 2022

Thanks for your quick response.

 

I guess I was recording multiple payments correctly, but my inventory asset account isn't registering correctly.

 

For example, I bought a car on April 13, 2021 for $37,900. I paid via cashier check for $26,068.04 to the lender to payoff the car and I paid the difference of $11,831.96 to the seller via cashier check. The problem is after I created a sales receipt on April 26, 2021, the register only deducts the inventory by $26,068.04 when it should be deducting the full purchase price of $37,900. I've attached a screenshot so you can see it.

 

How do I solve this issue?

 

Thanks!

A
Archie_B
February 6, 2022

Thank you for responding, rosegolf.

 

I appreciate the details and screenshot you've shared with us about this concern. Let me share some information about handling inventory assets in QuickBooks Online.

 

When recording an inventory asset that you purchased, you'll need to create bill to associate it with your expenses. This will debit the item's inventory asset account and credit your A/P accounts.

 

Also, the functionality of the sales receipt won't affect the inventory asset accounts. That said, you can delete the sales receipt and follow the steps given by colleague in creating a bill. Here's an article for more information: Enter bills and record bill payments in QuickBooks Online.

 

You can check out this link for more tips and guides in managing expense and vendors in QuickBooks Online.

 

Feel free to post or leave a comment below for any follow-up questions about expenses. Enjoy the rest your day!

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