If your vendor requires an advanced payment or deposit for inventory items Bizuno has a process to properly account for such cases. The basic premise is to create a new purchase to an Other Current Assets account and pay your vendor off of that invoice. Then create a Vendor Credit Memo offsetting the deposit and leave it open until the product arrives. Once the product arrives, receive in the Purchase order and post the purchase. Next, close the purchase by applying the new purchase to the Vendor credit.

This technique also works for partial deposits or down payments. Bizuno will track all transactions and you will have a detailed record of activity and a timeline tracing back from the original PO to the final payment.

The Details

  1. Create a Purchase Order for the items, Vendors -> Vendor Manager -> Purchase Order
    – Search and populate vendor information
    – Enter items
    – Fill out any other information relevant to this PO
    – Save (and print or email, etc)

    Vendor Deposit - PO
    Screenshot – Purchase Order

  2. Create an Invoice for the deposit amount, Vendors -> Vendor Manager -> Purchase.
    – Search and populate vendor information
    – Enter an invoice number (I use the vendor initials and date)
    – Create a single item line with no sku but a quantity of 1, description and the amount of the deposit, also change the GL Account to an account of type Other Current Assets
    Vendor Deposit - Deposit Invoice
    Screenshot – Deposit Invoice

    – Click Save and Payment to post the invoice and pre-load the payment screen.

    Deposit Invoice - Save and Payment

  3. Pay the invoice. The last step takes you to the payment screen automatically, but you can also get there through Banking -> Pay Bills -> (part of the vendor name).
    – Most of the form is pre-filled out, enter a Reference number (I use the initials of the business and date NB20180222)

    Deposit Payment
    Deposit Payment

  4. Create a Vendor Credit for the deposit amount,Vendors -> Vendor Manager -> Credit Memo. This creates a record that the vendor owes you something. Hopefully they will send the order but if not, they owe your deposit back. Either way, you have a record that you are owed something.
    – Search and populate the vendor information
    – Enter an credit memo number (I use the vendor initials and date)
    – Enter a single line to match the line of step 2. You can change the description to something related to this being a credit.
    –  Save, you will be relieving this later once your product is received.

    Credit Memo
    Credit Memo

  5. Receive in the items, enter invoice from Vendor, Vendors -> Vendor Manager -> Purchase.
    – Once the items are received, Create a journal entry receiving them in as normal.
    – Enter the Vendors invoice number in the Reference field
    – Save the purchase

    Receive Items
    Receive Items

  6. Pay the Invoice by applying the credit, Banking -> Pay Bills -> {search by entering part of vendor name}
    Pay Bills Search
    Pay Bills Search

    – Most of the form is pre-filled out. Make any necessary changes as needed
    – Check the boxes of all invoices to be paid, notice the credit shows for the deposit and can be taken at this time to close out the transaction.
    – Click on Save (Save and Print if you are generating a check)

    Pay Bill - Take Deposit Credit
    Pay Bill – Take Deposit Credit