Adjust advances paid to suppliers against their bills

Some suppliers want money upfront, especially in a rising market or for a first order. The owner transfers an advance, the goods come two weeks later, and then the full bill is paid again by the accountant who did not know. Advances to suppliers are easy to lose track of. In VERP, payables, payments and ledgers are connected to purchases, so an advance recorded against the supplier reduces what you owe when the bill is entered.

Where supplier advances go wrong

• The advance is paid from the owner's phone and the accountant learns of it weeks later.
• The bill is paid in full and the advance sits unused in the supplier's account.
• The supplier delays delivery and the advance is forgotten.
• Supplier ledgers do not match because one side did not record the advance.

Handling supplier advances

1. Record the advance immediately. Whoever makes the payment records it in VERP against the supplier the same day, with a note of the purchase order it relates to. If the owner pays from the phone, a quick message to the accountant to record it is enough.
2. Link to the purchase order. Make sure a purchase order exists for the goods. The order and the advance together show what is expected from the supplier.
3. Enter the bill against the goods receipt. When goods arrive, enter the goods receipt and supplier bill. The bill increases payables and the advance already recorded reduces the balance.
4. Pay only the balance. Before payment, open the supplier ledger. Pay what remains after the advance. This simple check prevents paying twice.
5. Review advances monthly. Look at suppliers with debit balances. These are advances waiting for goods. Chase delivery or ask for a refund.

How VERP helps

No double payments

The supplier ledger shows the advance before the bill is paid. The accountant pays only the balance, protecting cash that small businesses cannot afford to lose.

Delivery pressure on the supplier

Monthly review of advances shows which suppliers hold your money without delivering. You can follow up with specific amounts and dates.

Owner and accountant in sync

When advances are recorded the same day, the accountant and owner see the same balance, which avoids awkward conversations at month-end.

An advance is your money sitting with someone else. VERP keeps it visible against the supplier until goods arrive and the bill is settled. See the flow with your own supplier in a demo.

Questions people ask