How to record an advance payment to supplier and then apply to the bill once the bill is received?

You can record an advance payment to your contractor by creating an expense or cheque to hold an open credit on their account, then applying that to their bill once it arrives.

First, enter the money leaving your bank account as an advance credit on the supplier's balance.

1. Click the + New button in the top left corner.
2. Under Suppliers, select Expense or Check.
3. In the Payee field, add your contractor/supplier. Then, choose the Payment account.
4. Under the Category details section, select Accounts Payable and enter the exact amount paid. This will create an open credit directly on the supplier's balance.
5. Click Save and close.

Once the contractor completes the work and submits the actual bill, record it as you normally would. To link and clear the outstanding balance, use the Pay Bills feature and pay the open bill with the corresponding amount.

Leave a reply if you need further help with managing payments to your supplier.