How to Apply Vendor Credit in QuickBooks Online

Managing finances and keeping track of credits and debits is crucial for any business. One of the common scenarios businesses encounter is receiving a vendor credit. This article will guide you on how to apply vendor credit in QuickBooks Online, ensuring your accounts are accurate and up-to-date.

‍

Understanding Vendor Credits

Vendor credits arise when you've overpaid a bill or returned goods to a vendor. Essentially, it's money that the vendor owes you. QuickBooks Online provides a streamlined process to record and apply these credits, ensuring your financial statements remain accurate.

‍

Steps to Apply Vendor Credit in QuickBooks Online

1. Entering the Vendor Credit:
2. Navigate to the + New option and under Vendors, select Vendor Credit.
3. Choose the vendor's name from the dropdown menu.
4. Identify the invoices and sales receipts for which you received credit. Depending on your purchase records, select the relevant bills, Category details, or Item details.
5. If you hadn't previously recorded the bill, create a new one by selecting + New, then Bill. Input the details of the original bill in the Expenses tab and save.
6. In the Vendor Credit window, input the credit amount for the selected bills.
7. Once done, click Save and close.
8. Recording the Bank Deposit:
9. This step involves recording a bank deposit for the vendor check or credit card payment, linking it to the vendor credit.
10. Click on + New. Under Other or Banking, select Bank Deposit.
11. In the deposit section, choose the credit card account where the refund check was deposited.
12. In the Add funds to this deposit window, input the refund details. Ensure you select Accounts Payable in the Account column, even if you're recording a credit.
13. Once all details are filled, click Save and close.
14. Linking the Vendor Credit and Bank Deposit:
15. The final step is to link the vendor credit and bank deposit using Pay Bills.
16. Navigate to + New and select Pay Bills under Vendor.
17. Choose the bank deposit you created. The vendor credit amount should appear in the Credit Applied field.
18. Ensure the Total Payment is $0.00 and then click Save and close.

‍

FAQs

How do I use a vendor credit in QuickBooks online?

To utilize a vendor credit, you need to apply it against an open bill. This ensures that your financial statements reflect the correct amounts owed to vendors.

‍

How do I apply a vendor credit memo to an invoice in QuickBooks online?

Applying a vendor credit memo to an invoice involves selecting the specific invoice and applying the available credit. This reduces the amount owed on the invoice by the credit amount.

‍

How do I apply a credit from a vendor to a bill in QuickBooks?

In QuickBooks Online, navigate to the Pay Bills section. Here, you can select the bill to which you want to apply the credit. The available credit will be shown, and you can apply it directly to the bill.

‍

Where does vendor credit go in QuickBooks online?

Vendor credits in QuickBooks Online are recorded under the Accounts Payable account. They reduce the amount you owe to vendors and can be applied against future bills or refunded.

‍

Conclusion

Applying vendor credits in QuickBooks Online is a straightforward process that ensures your financial records are accurate. By following the steps outlined above, you can efficiently manage your vendor credits and maintain a clear financial picture for your business.

Note: Always consult with a financial expert or accountant when managing your business finances to ensure accuracy and compliance.

‍

More QuickBooks Solutions

1. How to Unapply a Credit in QuickBooks
2. How to Record Credit Card Payment in QuickBooks Online (Guide)
3. QuickBooks Online Refund (Comprehensive Guide)
4. Setting Up Pay Bills In QuickBooks Online
5. 1099 Quickbooks Online (Complete Guide)
6. What is Managing customers, vendors, and employees in QuickBooks?
7. Quickbooks Online Purchase Order: Full Guide