Manage Suppliers and Expenses
We can write checks to your supplier and track them using another current asset account to record prepayments for future goods or services, Evinna. I'd be glad to guide you in detail below.
To begin with, let's create a new account by following these steps:
- Click on the Gear icon in the top right corner of your screen.
- Select Chart of accounts.
- Click on New button.
- Choose the Current assets in the Account type, then pick Other current assets (OCA) in the Detail type.
- Complete the necessary fields and select Save.
Then, you'll need create a check on it.
- Click on the +New button.
- Select Cheque from the options.
- Enter the details for the check.
- Choose the OCA account you just created in the Category details.
Once done, convert the Purchase order (PO) to a Bill by the moment you actually received it. Also, ensure that you enter the OCA account in the Category details section with a negative value. This will reduce the asset account to match the amount you owe after the prepayment. If you still have outstanding bill balance, just pay it accordingly.
Another way to record payments without affecting inventory quantities is to refer to this article: How to track Prepaid Inventory. While this article is based in the U.S., the information is still relevant and applicable to users in Singapore.
You can also run reports to check the status of your inventory and see how much stock you have on hand and help identify any potential shortage.
Have you successfully completed the steps I provided above? If you have further questions or clarifications, please feel free to click the Reply button and we'll respond to you as soon as possible.
