I entered a vendor credit but it is not showing in the set credits to pay a bill. How do I make sure it is entered correctly to pay a different bill?

When a Vendor gives you a credit it is usually for something you had returned. If that is the case then you simply use the account such as materials or office supplies.

Now, to see if we can find that credit. "Vendors"  "Vendor Center", Go to the Vendor. In the Box to the right under the "Transaction" Tab is "Show", schroll down and click on "All Transacations". Then search for the credit. Once you find it then double click on it. Click on the tab above in "Reports" then click on "Transaction History". This will show what happened to that credit.

If the credit had somehow been attached to another bill, then go to the credit, click from credit to bill, then back to credit. This is the only way I know to disconnect the credit from the bill.

Thanks for reaching out back to us again, @Djwpe,

The steps shared by my colleague works for QuickBooks Online, so the preference are different with your desktop software. Furthermore, the steps you've followed should create an outstanding credit when you pay a bill, given that the automated application of credits is turned off.

I'll be providing some screenshots to show you the entire process, so you can review the transactions you've created. First, when making the deposit of the vendor check, perform these steps:

1. Click the Banking menu and select Make Deposits.
2. Press OK if the Payments to Deposit window appears.
3. Now, in the Make Deposits window, select the Received from drop-down and choose the vendor name who sent you the refund.
4. For  the From Account drop-down, select an Accounts Payable account.
   
5. Add actual amount of the Vendor check in the Amount column .
6. Fill out any important information in the Deposit.
7. Hit Save & Close.

Next, let's record a Bill Credit for the amount of the Vendor Check. See this:

1. From the Vendors menu select Enter Bills.
2. Click on the Credit radio button to account for the return of goods.
3. Add the same Vendor name on the deposit we created earlier.
4. In the Expenses tab, enter the expense account you would normally use for refunds.
5. Then in the Amount column, input the appropriate amount for the account(s) you initially added.
   
6. Once done, press Save & Close.

Now, we will link the two entries using the Pay Bills option. Here's how:

1. Go to the Vendors menu, then select Pay Bills.
2. Check the deposit that matches the Vendor check amount under bills to be paid.
3. At the lower right section, click on Set Credits and apply the Bill Credit you created earlier then select Done.
   
   
4. When all set, choose Pay Selected Bills, then select Done.

Regardless, there are different scenarios that requires specific set of steps to account for a vendor refund. I would still recommend checking this article for other ways to record them in QuickBooks: Record a vendor refund in QuickBooks Desktop

Please tap me again for any updates or if you need further help. I'll be more than happy to share some more information to help you with vendor credits. Have a good one!