Normally when we pay for inventory in advance we send the payment to an account called “advances paid to suppliers.” However, in a supplier profile, I tried to add “advances paid to suppliers,” an asset account of type “receivable,” but the system did not allow me to add it.
Is it not necessary to have an “advances paid to suppliers” account?
Advance payments to suppliers is easily handled in ERPNext. You can make a PO (Purchase Order) for supplier and then make a JV (Journal Entry) as per the below screenshot, please note that all the payments to suppliers are made to their default payable account which is “Creditors” in erpnext which is a liability account.
I hope the above resolves your query.
Hi @adityaduggal, I think so. Basically I can delete the accounts we used to use for advanced paid to suppliers.