Process Deposits Paid to Vendors

You can use the Purchase Order module to record and process deposits paid to vendors against purchase orders before the goods and invoices are received.

These prepayments are posted to the payable deposit asset holding account that allows you to track cash paid for items not yet invoiced. The payable deposit account is credited by the Accounts Payable module with the deposit amount when the Accounts Payable Invoice Data Entry or Manual Check and Payment Entry update is performed. The payable deposit account is debited by the Purchase Order module when a receipt of goods entry or receipt of invoice entry with a prepayment deposit is updated. Payable deposit account postings are detailed with reference and vendor name information.

To verify that deposits to vendors are properly recorded and processed

Select Purchase Order Setup menu > Purchase Order Options.
In the Payable Deposit field, enter the payable deposit account number. For more information, see Purchase Order Options - Fields.

The payable deposit account number is set up in Account Maintenance. For more information, see Create and Maintain Accounts in Account Maintenance.

Click Accept.
Select Purchase Order Main menu > Purchase Order Entry.

In the Order Number field, enter the purchase order number or click the Lookup button to select the order. For more information, see Purchase Order Entry - Fields.

The deposit is recorded in Purchase Order Entry. For more information, see Record Deposits on Purchase Orders.

Click the Totals tab. In the Less Prepaid Amount field, enter the deposit amount.
In the Prepaid Check Number field, enter the check number and click Accept.

This entry is printed on the purchase order as a memo amount and on the Open Purchase Order Report.

Although the prepayment information is entered in Purchase Order Entry, Receipt of Goods Entry, and Receipt of Invoice Entry, the actual cash disbursement for the payment must be recorded first in General Journal Entry, or in Accounts Payable Invoice Data Entry or Manual Check and Payment Entry. Be sure you enter the account specified in Purchase Order Options as the payable deposit account to offset the posting to cash.

The payable deposit account is debited with the deposit amount, and the cash account is credited. The balance of the payable deposit account represents the total outstanding deposits (payments issued for purchase orders that have not yet been invoiced).

Note General ledger postings and adjustments of the vendor balance are not made in this time.

Select Purchase Order Main menu > Receipt of Goods Entry.
In the Receipt Number field, enter the receipt number or click the Lookup button to select the receipt. For more information, see Receipt of Goods Entry - Fields.
In the Purchase Order Number field, enter the purchase order number or click the Lookup button to select the purchase order.
Click Yes when the message asking you to receive the complete purchase order appears.
Click Accept.

The deposit amount entered on the purchase order is recorded against the invoice and reported on the Daily Purchases Journal. For more information, see Enter a Receipt of Goods or Enter a Receipt of Invoice.

Select Purchase Order Main menu > Daily Receipt Registers/Update. The Receipt of Goods Register window appears.
Click Print to update the register.

After the Daily Receipt Registers are printed, the invoice balance will be the invoice total less the deposit amount. General ledger postings from the Daily Receipt Registers update credit the deposit amount to the payable deposit account and debit the accounts payable account.

Deposits to vendors are properly recorded and processed.