Supplier Deposits are money that you have paid to a supplier which can be used against future purchases. 

NOTE: Supplier deposits are used to make payments to invoices. If using Xero as your accounting system, ensure Xero payment settings are set to Synced both ways or Pushed to Xero. QuickBook Online payments are set by default to sync both ways. Some users prefer to entirely manage their payments through their accounting system.



Table of Contents:

  1. Set up an Account for Supplier Deposits
  2. Add a Supplier Deposit 
  3. View Supplier Deposits
  4. Use Supplier Deposits

Set up an Account for Supplier Deposits 

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Before using Supplier Deposits, you will need an account to hold them. It must be a current asset account (for Xero and DEAR standalone users) and have the ability to accept payments. Xero and QBO users can create accounts through their accounting system, DEAR standalone users can go to Settings → Reference Books → Financials → Chart of Accounts. For more information about account settings and creating accounts, see Accounts and Chart of Accounts

Once you have prepared your Customer Credit account, go to Settings → Reference Books → Financials → Account Mapping to make sure it is correctly mapped. Save your changes to finish. 

Add a Supplier Deposit

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Once you have an account to hold your supplier deposits, you can start adding supplier deposits with your different suppliers. There are three methods of adding a supplier deposit: through a purchase order, through a credit note/refund, or through the Spend Money function.

Add a Supplier Deposit Through a Purchase

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Supplier Deposits can be allocated to a supplier through a purchase order, for example, if you have paid a deposit towards the items or services ordered.

NOTE: This procedure assumes that you are familiar with creating purchase orders. For more information, see Creating a Purchase Order.

  1. Create a new purchase order by navigating to Purchase → New → Purchase or choose an existing purchase order that has not yet been paid.
  2. Fill in the document header details as required.
  3. Authorise the order. This will make the Supplier Deposit button visible. 
  4. Click +Supplier Deposit to add the deposit details.

  5. In the pop-up window that appears, enter the deposit amount, date of payment and which bank account it is to be paid from. The account will be automatically set to the Supplier Deposits mapped account (see above). 
  6. Click Create to finish.
  7. Complete the purchase order as usual. The Supplier Deposit will now be associated with this supplier and able to be used as payment. 

Add a Supplier Deposit Through a Credit Note/Refund

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In some cases, you may receive a refund from the client in the form of supplier credit. The Credit Note function can be used to add this as a Supplier Deposit on your account. 

  1. Navigate to Purchase → Purchases and choose the purchase that the credit note will be applied to. It must be a purchase with an authorised invoice that has been paid.
  2. Go to the Credit Note tab and fill it out. See Credit Notes for more details on the credit note function and fields.
  3. Authorise the credit note.
  4. Scroll down to the Payment section. Click +Supplier Deposit to add the refund value as a deposit against future payments. You will be prompted to add a reference and amount. When you make a purchase from this supplier in the future, you will be able to use this deposit as a payment method.

Add a Supplier Deposit Through Spend Money

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Creating supplier deposits through the spend money feature is useful when a prepayment is made which does not relate to any particular purchase, but still needs to be accounted for.

  1. Navigate to Financials → Spend Money.
  2. Select the bank account you are sending the deposit from (the 'Bank Account' field), the Supplier you are sending the money to (the 'To' field) and Date (the 'Date' field).
    • In the product dropdown, you might want to consider setting up a generic service item called Deposits to classify these payments.
  1. Enter the Amount deposited and change the account to the account you have assigned to Supplier Deposits.
  2. Select the supplier deposits Account
  3. Click Complete to finish. 

View Supplier Deposits

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View all the Supplier Deposits currently created for different suppliers. 

  1. Navigate to Purchase → Supplier Deposits.
  2. The list of supplier deposits for each customer will be displayed. The transaction the deposit is associated with can be accessed by clicking the link in green.

Use Supplier Deposits

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Supplier Deposits can be used to offset payments owed. It can be applied to the purchase at the Invoice stage.

  1. Choose an authorised invoice for the supplier you have paid the deposit to from Purchase → Purchases. 
  2. In the tab, click +Use Supplier Deposit.
  3. Select the relevant credit from the existing deposits list. It will be added to the payment section and subtracted from the outstanding balance. You can then use another payment to close out the purchase invoice.
  4. Click Add & Save. The Supplier Deposit will be subtracted from the invoice outstanding balance. The outstanding balance can then be closed out with a further payment. 

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