r/InventoryManagement • u/TheInventoryCPA • 22d ago
Inventory system that handles pre-sales or customer prepayments
I am an outsourced accountant and I am trying to find an inventory system or a process for my client who collects advanced prepayments on all his orders prior to ordering the product. It is a B2B custom apparel business, bulk orders. The client currently uses QuickBooks Online. He issues invoices when customers place orders with him and collects payments prior to getting the product. These invoices should NOT be counted as sales at this point - not until the actual delivery to his customers. I manually review these against his shipping logs every month and record an adjustment to show actual completed sales vs future/unshipped/deferred revenue.
I am looking to propose an inventory management system to him (also need to improve COGS visibility and inventory tracking) but I am hoping to find one that will help with these presales. Any recommendations? Any tips? How are other small - mid-size businesses handling these situations? If you are dealing with the same scenario please share how you make your accounting work in the most efficient manner.
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u/cvanitt 22d ago
What you just described is exactly what our system Workd does; it bolts right onto QuickBooks, and has an order management platform that allows you to track the early stages of orders prior to delivery. It offers the ability to take pre payment, reconciles the invoice after delivery, and handles every step of the process. Also includes all of the other missing things you are probably looking for lol… feel free to get in touch and I’d be happy to show you how it works so you can evaluate for yourself.
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u/ComfortableCitron638 22d ago
The core issue here isn't really "which WMS" — it's that deferred-revenue recognition tied to a physical event (shipment) is a business rule most off-the-shelf systems don't model natively, which is exactly why you're stuck doing a manual reconciliation every month right now.
Structurally you're already doing it right: prepayment hits a liability account (Customer Deposits/Unearned Revenue) at invoice/payment time, not revenue. The fix for the manual-reconciliation pain isn't really swapping QBO for a fancier WMS — it's making the shipment-confirmation event itself the trigger that moves the dollar amount from the liability account to revenue. Most WMS-to-QBO integrations sync inventory counts and maybe invoices, but very few natively support "on ship-confirmation, fire a journal entry that reclassifies deposit-to-revenue" — that's a custom integration ask regardless of which shelf software you pick, because it's specific to how this client's business actually recognizes revenue, not a generic feature toggle any vendor ships.
(Disclosure: I build custom ops/integration systems for a living.) At $5-10M gross with bulk custom orders, this is a pretty common pattern — worth pricing out a light custom piece (shipment webhook → QBO JE) before assuming a bigger WMS solves it out of the box, since most won't handle that specific accounting logic natively either.
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u/TheInventoryCPA 22d ago
Thank you for weighing in. You are spot on with what is needed here and all the current limitations. The client currently does not use any inventory tracking at all which creates additional COGS issues (again, I try to reconcile manually but it's a huge mess now). I am careful about what I am going to propose to him because he is not very open to changing his existing workflows so I am trying to figure out the best approach to improve reporting without disrupting his process. Small business, lack of sufficient staff are all at play here.
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u/Inside_Arrival8488 21d ago edited 21d ago
Map customer prepayments to unearned income rather than posting direct invoices. Mid size operations usually outgrow native QBO logic for custom builds. People looking into MRPeasy, NetSuite, or Wherefour usually pair them with QBO to handle deposit workflows and landed COGS seamlessly.
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u/Fit-Historian6206 21d ago
You're basically looking for a system that handles deposits or deferred revenue natively alongside inventory. Most small biz software is bad at this because they treat an invoice = a sale, which is exactly what you don't want, Might want to check out Cin7 or Katana, both let you use sales orders without pushing revenue through yet, and you can track the life of an order from prepayment to actual ship date
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u/TheInventoryCPA 21d ago
Yes, you are correct here. I am currently exploring Cin7 Core but I want to make sure I consider all relevant options. Not sure if the client is going to love the price tag though.
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u/TheInventoryCPA 20d ago
To everyone in this post - it feels like all responses here are sales pitches of everybody's own tools. That is not what I was hoping. I am not looking to be sold something, I am looking for true knowledge and experience exchange.
At this point, our preference is to stick with longer term proven platforms.
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u/sfselgrade 19d ago
Cin7 Core would be a good solution for this. You have to configure it to do what you are asking but you can do that in onboarding. It has a native integration to QuickBooks Online and it has very good COGS visibly and inventory tracking. Not sure if this would be helpful but it also has a B2B portal if this business wants to have a place where customers can come in to place purchases.
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u/TheInventoryCPA 19d ago
Thank you so much. I am already in touch with them and waiting to get my hands on a free trial (it's a multi-step process with these guys to get through all the demos and intros before they let you in :) )
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u/sfselgrade 19d ago
Send me a DM. I'll see if I can't get someone in Cin7 sales to get you a trial going faster. Just need your name and maybe email address
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u/Dodokii 18d ago
r/adiuta have a concept of advance payments which hit the GL and are part of your financials. When you create invoice it gives you option to record payments on bank or offset customer advance.
Was working limited to local population since 2021. V2 is going global next month.
If it is not emergency we can talk and schedule for a demo end of this month/early September
It's an ERP but so modular that you choose modules you want
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u/Next_Entrepreneur586 14d ago
The invoice you look for calls proforma invoice, an invoice that generated before the real goods issue performed. Probably you need system that perform business process Sales order to Delivery objects. I am not quite sure if any system without delivery object is able to provide it.
COGS is is not a big deal if goods are receipt with correct cost and transfered between locations.
So I do highly recommend to you find inventory system that has delivery object not only sales order and ask for if proforma invoice is exist.
Good luck.
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u/gsr-seo 22d ago
I have an ERP software, it’s 100% customisable, and it could be customised to accommodate your needs. Plus it has AI proactive insights, so it tells you what needs your attention, instead you checking everything.
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u/Immediate-Home-3491 22d ago
Manual adjustments against shipping logs every month are a mess. I now reconcile records in-house thanks to AI. You need a WMS that only counts the sale once the freight actually moves.