Handling Vendor Deposits in QuickBooks

Sometimes our vendors require us to give them a deposit before they will perform a service or ship a product. The deposit is due before they send you the bill. To record this properly:


Write the Check:

1. Click "Write checks" to create a check
2. The payee will be your vendor.  The amount will be the amount of the required deposit.  Tie the check to "Accounts Payable".  Click save and close to record.

Record the Bill:

1. When the bill arrives, record it as you would any other bill.

Pay the Bill:

1. Click "Pay Bills"
2. Select the bill to pay
3. Click "Set Credits" 
4. Select the previous payment to be applied to the bill.   Click "Done"
5. If there is still a balance due, it will appear in the last column.  That will be the amount of your check.  Click "Pay Selected Bills". 
6. If there is no longer a balance due, the last column will show "0".  You are basically writing a check for zero dollars.  Even so, you will still have to click "Pay Selected Bills" to record applying the credit to the bill.

What do you then send to your vendor?  Since the bill payment check does not show the credit which has been applied, you might want to open up the bill and then do the following:

1. Click the "History" button at the top
2. This screen shows both the check which paid the deposit and the check which paid the final amount
3. Click "Print" and send with the check to the vendor.