Removing Vendor Deposits from the Open Vendor Deposit Report

Modified on Mon, 06 Aug 2018 at 02:41 PM

Vendor Deposits (Supplier Deposits) are money that has been sent to a Vendor on a Purchase Order, but the Vendor has not sent a Vendor Invoice to use that money.  The Vendor Invoice is the trigger to clear out the Open Vendor Deposit and move the money from the Asset Account into WIP or COGS.

Often times Vendors will be paid in full with a Vendor Deposit and will never send an Invoice to show that the bill is paid in full.  Without the Vendor Invoice being recorded, the Vendor Deposit account will grow, and your COGS will be understated.  As always, it is recommend that you check with your bookkeeper/CPA as to the best Month/Year for these entries to be cleared out.

To view what is in the Vendor Deposit account, it is recommended you run the Open Vendor Deposit report located in the Accounts Payable folder of the Reports.

In this example, we will clear the $600.00 deposit against CAR01-0009 which is for goods that were paid in full, but no Vendor Invoice was received. 

Please note how the Amount Due is Zero.  This entry will not create an Accounts Payable Entry, but will clear the Open Vendor Deposit. 

In the example below, notice how the amount due is Negative. We can contact the Vendor to see if we are due a credit.

In this example, no credit is due, there was a freight charge that was also included in the Deposit, but the Purchase Order was never updated to reflect the freight.  A freight charge will be added to the Vendor Invoice so no balance is carried in Accounts Payable.

Notice how the Amount Due is now zero.

This same procedure can be applied if the Amount Due is positive, by editing one of the Components that were ordered. 

Perhaps there was a price break that was not noted on the original Purchase Order. 

Just to reiterate, the Less Deposit figure is never manipulated, it is always the Cost on the Vendor Invoice Distribution window that is changed to match the Less Deposit figure.  This will ensure that the entire Deposit is cleared and that no entries are created in Accounts Payable.