QB Issue Resolution:

Prepayments you make to others are posted as Other Asset; this is the same as an Escrow activity = they have your funds.

You post the details of the expense as a Bill or check, as if you are going to pay it in full. Allocate everything, as usual.

Then, you Apply your prepayment, the same way they do, to show it has been Used. That means you list the Other Asset account and value as Negative. This gives a Net Check or Net Bill.

The prepayment does not change Expense. It changes Banking = you won’t need to send Gross owed.

Resolution for Issue 'Can I make pre-payments to a payroll service, then pay the actual payroll invoices with costs allocated to specific expense accounts?' available: Yes (Solved).
Source: Intuit Community forum.

Can I make pre-payments to a payroll service, then pay the actual payroll invoices with costs allocated to specific expense accounts?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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