Firstly you need to create the appropriate accounts:
- Create a CURRENT ASSET account called Supplier deposits
- Create a charge item with the EXPENSE account mapped to this account
You can then either use the basic method using Cash Purchases - or use the method including Purchase Orders instead (which allows for better tracking).
Create the accounts and charge item as above. Then create a Cash Purchase using the charge item for the amount of the deposit. When the goods arrive create a Bill for the goods AND the charge item with the deposit amount in negative.
If you check account entries on the Bill you will see that the accounts are updated correctly.
Create the accounts and charge item as above. Then follow example below:
You have a PO for some goods for 600.00 for example and you need to pay 60.00 deposit. Once you have entered the line items for your goods you simply add the charge item you have created for supplier deposits - entering first a value of 60.00 and then add it a second time entering a value of -60.00 - bringing the total balance back to 600.00. At this point you probably don’t want the deposit line items printed on the PO if you are sending it out so you can simply toggle them off by clicking on the line number (when in edit mode).
Next select the positive deposit line item and click on Actions > Create Cash Purchase (you could create a bill here too but cash purchase is quicker and simpler!). Simply enter the payment method and save the cash purchase - you will see that it has the PO ref automatically populated in the Our Ref field. If you click on this link it will take you back to the PO and you will see the deposit line item shows a tick indicating it has been paid.
When you receive the goods/bill you simply select all the other line item(s) to create your bill - the item that has already had a cash purchase created will not be carried over. The total of the bill will reflect the deposit already paid (total 540.00).
You can then make the payment on the bill as normal - the PO will be fulfilled and you will be able to view both the transactions (cash purchase and bill) from the transactions tab on the PO. More importantly the Accounting 'under the hood' will be correct.