Application or Knocking-off Vendor Prepayments / Advances to Suppliers
I am a Professional Accountant and have used Oracle R12, Microsoft Dynamics GP, QuickBooks in addition to few other apps. I recently started using Wave for my new employer and found it good so far. I tried around a dozen web apps before using deciding to use Wave; Wave is a quite decent app but yes, there are few necessary features missing like vouchers printing, approval workflows etc. I hope the devs will be adding them sooner or later. Even that, we have managed to do our work with few workarounds and a few still need to be figured out like Deduction of Tax at Source (at the time of payment).
Anyway, lets come to the subject, I have two things to share with you guys:
1. How to create Vendor Prepayments or Advances to Suppliers in Wave.
2. How to apply / knock-off Vendor Prepayments in Wave.
1. How to create Vendor Prepayments or Advances to Suppliers in Wave
- Create a new account in Chart of Accounts under "Assets > Vendor Prepayments and Vendor Credits" as a control account for Vendor Prepayments / Advances to suppliers
- Go to "Accounting > Transactions > Add expense" with following selections:
- Select your Bank or Cash Account in "Account" field for "Withdrawal".
- "Add vendor" and select the Vendor in whose name you want to make a Prepayment / Advance payment
- Select the newly created account (as mentioned above) in "Category"
- Enter your cheque or transaction no. in the notes to track it from the bank statement in the future.
- Save it
- Use "Mark as reviewed" as an approval feature (although approval and transaction posting feature is missing in waves but its good to use this tick mark to use a senior review)
You are all set. Prepayment / Advance to Supplier can be seen in both Vendor (Accounts Payables (AP)) reports as well as in Balance Sheet (General Ledger (GL))
2. How to apply / knock-off Vendor Prepayments in Wave
When the actual bill / invoice from supplier arrives, you can record it in Wave and knock the previously available Prepayments. Currently, I don't see a feature for knocking-off / applying individual Prepayments to Vendor invoices but let's discuss what can be done for now:
- Go to "Purchases > Bills > Create a Bill" (It would be nice if you have created all numbered items in a series for a particular class of items)
- After you have saved a Bill, go to "Record a Payment".
- Select "Other" as a "Payment Method" (You can always "Other" as "Payment Method" for Prepayment applications to give you a track that a particular "Record a Payment" was used for Prepayment application
- You must select the newly created account as payment account (as used mentioned above; which you chose as "Category" during ------- "Accounting > Transactions > Add expense" in the Step 1)
- Enter details of prepayment application in the Memo
That's all. You can check the AP and GL reports.
Please let me know if this works for you too.
- The same "Record a Payment" form can be used to apply Prepayment.
- Add a new line in LOV/Drop-down "Payment Method" named as "Apply Prepayment"
- The LOV/Drop-down "Payment Account" should act as a dependent LOV/Drop-down when "Apply Prepayment" "Payment Method" is selected.
- There can be a link to another form to show a table of existing prepayments of the vendor (must allow entering amount to apply; it isn't necessary to apply the whole of Prepayment)
Please let me know if you like it. I hope we can work together to improve Wave.