How to handle vendor deposits or pre-payments
mjtimber
Member Posts: 2
Hello I'm new to Wave and very happy to have the privilege of using such a marvellous accounting solution for free and free means real free.
I've a situation where I had to pay Advance/Prepayment to vendor regularly for purchasing raw material and later needed to adjust with the bills they submit. Now I've created Advance Asset Account under Vendor Prepayments in which account I record all advance payment. But when I settle the bill using this Advance account it doesn't decrease in Purchase by Vendor report. For example here I settled the bill $11,700 using advance against $60,000 which should be deducted on ABC vendors account but it remains $60000.
I want to track the adjustment against advance I paid to vendors. Is there any workaround for this in wave?
Comments
Hi @AlexL @Alexia @JamieD @ZoeC @Ryan_W all Please I'm kinda stuck so help appreciated too much.
Hey @mjtimber . Thanks for the compliments on the platform, we're glad to be able to offer you a great product!
After reading this, I think you're overcomplicating the process. All you have to do is create a Bill for the amount that that you pay in pre-payment and when the vendor actually sends you the Bill with the amount, you can just mark the necessary amount as paid. Because of the nature of the accrual software in Wave, the Bill is marked in your accounting as soon as it is created, so you don't need to worry about any of these additional steps you're taking.
Hello Admin,
I've been using wave for the past few years and should admit that it's such a wonderful package you have developed and offered to use absolutely free.
I too facing the same problem as @mjtimber posted.
In my business model, there are many instances where I've to make partial prepayments to the vendor. For this, I goto accounting transactions and make an expense from my bank to "advance to supplier" that's created under the vendor prepayments in assets.
In the general ledger report, I can see all debit prepayment transactions of the particular vendor/contact under advance to supplier but does not show any credit amounts adjusted. However, when I select all contacts, it shows debit and credit adjustment against all vendors.
When contact selected:
How do I view credit adjustments also for each vendor or should I change the "advance to supplier" to cash/bank from vendor prepayment?
Appreciate your response and thanks in advance.
Hey there @Fahad
I believe the resolution to this issue here is what Alex had mentioned.
Essentially adding a vendor to a transaction will not appear in your account transactions report. The only type of transaction that will appear when you select a vendor from the drop down is when you create a bill under the purchases section > then add the vendor to the bill.
Check out Alex's response above.