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Prepayments to a supplier

I’m strugging to get my head round how to post the following:

We prepay Toll Crossing (£200) on the company credit card
Statements come from the company and I create bills for the amount used(£45)

Do I mark those bills as paid by the Credit Card?
Or do I create a prepayment on the Toll company and mark the bills from this? If so, when the Credit Card bill comes in do I do as usual and transfer from Current Accnt to Credit Card Accnt the full value of the Credit Card bill?

I’m sure this isn’t complex but it is melting my brain this morning.

Hi @WalkerTim

It’s probably best if you tag the initial £200 as a pre-payment to your supplier and then each time a £45 invoice is issued tag those as paid from the pre-payment credit.

I hope this helps, but if you have any further questions, please don’t hesitate to ask.

so would I then transfer £200 less from current account to Credit Card Account?

Or when I put the prepayment onto the supplier, do I tag it as coming from the credit card account and proceed as normal with the transfer between Current and Credit Accounts?

Hi @WalkerTim

Without having access to your account, it is hard for me advise on this because I can’t see how you have everything set up.

However, I would suggest that when the money leaves your account for the pre-payment to the supplier, you tag this to the supplier.
This is done through clicking Tag Payment followed by Payment to a Supplier and then Pay down multiple invoices or assign to a supplier then enter the name of the supplier you want to the per-payment to be linked to. Then select the option Payment on account:

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Once you have saved this, the payment will appear on the client details screen:

When you receive an invoice from your client you can opt to log a payment to them from this pre-payment amount.

As I’ve previously mentioned, without knowing more about your account and how you normally deal with payments, I’m not really able to give more advice than this.

I hope this helps, but if you have any further questions, please don’t hesitate to ask.

This sort of prepayment is difficult.
I had a similar issue with using Post Office Drop&Go.

After getting tied in knots with prepayments I created a new “bank” account for Drop&Go. The prepayment is a bank transfer and I pay the purchases from the account.

I’d say this is back to the issue of Quickfile being a nightmare when dealing with credit accounts. Post credit note directly to account (not to specific invoice)

Yet another issue here that would be fixed if suppliers that you have a credit account with were just treated like a bank account.

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I do foresee an issue with creating it as a bank account. If you’re on cash accounting for VAT, it wouldn’t be included automatically, whereas with a pre-payment as per @QFSian’s post, it would be.

If it’s a true prepayment and being held by them on account (which is what I believe @WalkerTim has said), then I believe the method @QFSian posted would be the best way to handle this.

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