Goal:
How to create a bill for a deposit
How to indicate a down payment
The following workflow is only available to customers on the new Accounts Payable module (Beta). To identify which version of Accounts Payable you are using, see Which version of the Accounts Payable Module do I have?
What are Deposit payments?
The Deposits functionality provides an improved workflow for creating purchase orders and bills for deposit payments, eliminating the need for complicated workarounds that lead to discrepancies in receiving and accounting bookkeeping.
This is useful when you need to pay a deposit on:
venue hire
equipment rental
bulk order of supplies (typically with a new vendor)
consulting or contracting services
custom orders
What are the benefits?
The new Deposits Workflow ensures that you can easily follow best accounting practices for tracking cash flow in your general ledger, allocating deposit payments to your prepaid expense account codes when they are paid, then into the applicable account code once items are received and paid in full.
Overview of Steps
Creating a Purchase Order with a deposit
There is a new Deposit field in the Totals section when creating a Purchase Order.
Important: The deposit amount cannot exceed the total cost of the PO, and cannot be a negative amount.
Creating a Bill for the deposit
Navigate to Accounts Payable → Create Bill
Select the applicable Purchase Order
The items from the PO will populate the bill
You will see two more line items: a deposit, and a negative deposit credit
Delete all line items other than the deposit line item by using the 3-dot options button then selecting Remove Item.
Allocate the deposit amount to your account code for prepaid expenses by using the 3-dot options button then selecting Edit Item.
Submit the bill.
Creating a Bill for the remainder invoice/payment
Navigate to Accounts Payable → Create Bill
Select the applicable Purchase Order
The items from the PO will populate the bill
You will also see the negative deposit credit which was removed from the bill when you created the bill for the deposit payment.
Allocate the negative deposit credit to your account code for prepaid expenses by clicking the 3-dot options button then selecting Edit Item.
Submit the bill.
Step 3 above re-allocates the deposit amount from the prepaid expenses to the appropriate account code for the item.
Additional Information:
Deposit Payments is not compatible with the Pay by Credit Card option on Purchase Orders.
Taxes are not supported on Deposit payments.
The Deposit amount can only be edited on the PO and must not be associated with a bill, including draft bills. Ensure to remove the deposit from all bills editing the deposit amount.
AP Automation will automatically create bills with the deposit line items as seen above.