How to handle vendor deposits or pre-payments

mjtimbermjtimber 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?

edited October 8, 2019 in Accounting Technical Support

Comments

  • mjtimbermjtimber Member Posts: 2

    Hi @AlexL @Alexia @JamieD @ZoeC @Ryan_W all Please I'm kinda stuck so help appreciated too much.

  • AlexLAlexL Administrator Posts: 1,091 admin

    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.

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