Canary Products Inc Quickbooks Process on Inventory Procurement
Step 1. Create Purchase Order -
Go to + Menu then under vendor click purchase order. PO has no effect in the Balance sheet or Income statement, this will only allow you to send orders to vendor and tract the amount of order . This will remain open until you actually receive the items listed in the PO.
Step 2. Create Bill -
Go to + menu under the vendor click bill. This will allow you to pay vendor in advance, its effect to the balance sheet is increase accounts payable, and increase incoming inventory. This will help you tract your payable in a certain vendor and tract how much incoming inventory you have Note that the bill no should have a ref of PO-1012, to show that this bill is intended to the said PO..
Step 3. Making Payment or Advance Payment -
Go to main menu (can be found in the left side of the Homepage) select vendor , then click make payment. The effect in the balance sheet is decrease of accounts payable and decrease in bank balance. Make sure that you apply the advance payment or payment to the right vendor and right Bill reference. Always check bank use to the particular vendor, so that this payment will auto matched with the bank.
Step 4. Receiving Inventory -
Go to main menu, click vendors, select vendor ad click copy to bill (put in the bill no D-1012, mean that the said PO is already delivered to you) then save. Its effect to the Balance Sheet is increase inventory assets and increase payable.
Step 5. Review Vendor’s Ledger -
Go to main menu, click vendors, select vendors. You will now see 3 transactions with reference 1012 for Purchase Order you sent to Vendor, PO-1012 this where you make advance payment and full payment and D-1012 which mean that the items listed in 1012 is already received and will lead you to step 6. Click Make Payment.
Step 6. Make Payment for the Inventory with actual received -
Go to main menu, click vendors, select vendors then click make payment . It is important that you make payment against Prepaid incoming inventory and put reference same as the reference of received inventory bill. The effect of this in Balance Sheet is Decrease of Prepaid inventory and decrease of payables.
End of Process