Rustler’s Quickbooks Tips

Sometimes you have to either pre-pay for items ordered, or pre-pay a deposit on items ordered.

To order and pay for the items
1. Create a purchase order for the items.
2. Create a current asset account, and name the account “Prepaid inventory” or a similar name.
3. Enter charges for the items by:
a. Entering a credit card charge. When QuickBooks indicates that you have an open purchase order for the vendor, do not select the purchase order.
b. On the Expenses tab of the check or credit card charge, click the Account field. Choose the other current asset account that you created. Then, save the check or credit card transaction.

That puts the amount of the pre-payment or deposit in the “other current asset” account you created.

To receive the items
Find the check or credit card charge for the transaction.

1. On the Expenses tab, select the line that contains your other current asset account.
2. Go to the Edit menu and click Delete Line.
3. Click the Items tab.
a. Click Select PO.
b. Click the purchase order that contains the items you paid for and then click OK.

If necessary, record additional expenses (such as shipping) on a new credit card charge or check. Don’t add additional expenses to the existing credit card charge or check.

Save the transaction.

That takes the amount in the pre-paid other current asset account and transfers it to the purchase of inventory.