Written by Gary ClarkFriday, 02 November 2012 09:33
How To Pay Multiple Vendors From A Single Bill
Here’s the situation. A store orders merchandise for resale and has to pay a different company for the shipping. He wants to include the shipping costs in the cost of his merchandise. In POS that’s easy. Simply add the freight cost to the receiving voucher and check the box to spread that cost across the items received. The problem comes in after the financial exchange and POS has created the bill in the financial program. How do you pay a bill for one vendor when the payment is actually being made to two separate vendors. Here’s what needs to be done in the financial program to get this accomplished.
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These steps assume that you have already created the receiving voucher in POS with the freight added in AND done the update to your financial program. You should have a bill created by POS for the merchandise vendor that includes the freight charges.
The first step is to create a “wash” account. If you are using account numbers this would typically be 99999. You can name this account Transfer, Suspense or whatever makes the most sense to you.
Now, go to the “Company” drop-down menu and select “Make General Journal Entries…”
NOTE: You will need to make 2 Journal Entries to move the shipping expense from the merchandise vendor to the trucking/shipping vendor.
In the example below the merchandise vendor is A Cheung Limited, the shipping vendor is Al’s Trucking and the wash account is named Suspense.
Journal entry #1 will debit the freight charge from Accounts Payable for the merchandise vendor and credit it to the wash account.
Line 1 – Debit Accounts Payable for the amount of the shipping. Under Name, A Cheung Limited.
Line 2 – Credit Suspense for the same amount.
Journal entry #2 will debit the wash account for the freight charge and credit it to the shipping vendor.
Line 1 – Debit Suspense for the amount of shipping.
Line 2 – Credit Accounts Payable and under Name select Al’s Trucking.
Now both the shipping charge and the charge for the merchandise are both tied back to the full/true cost for the merchandise you’ve received.
At this point you can pay the shipping vendor as you would normally.
Open the merchandise vendor’s invoice. Click Set Credits and select the amount for the freight charges. What’s left is what you owe the merchandise vendor for the items ordered/received and you can pay that as you normally would.
This will keep your true cost for your merchandise straight and give you better reporting capabilities for the cost of your inventory.
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