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How do I handle supplier credits and refunds?

The following article provides steps in handling supplier credits and refunds. If you're not sure when to use Pay Bills and Write Cheques, see What is the difference between bills, cheques and expenses?

Scenario 1: If a supplier credit got refunded, link a supplier refund to a supplier credit

Below is a short video on how to match supplier refund to supplier credit.

Step 1: Enter a Supplier Credit:

  1. Select + New.
  2. Select Supplier Credit.
  3. In the Supplier field, select the appropriate supplier name.
    • Enter the Date.
    • Amount.
    • Account: the account used here is typically the original expense account on the original bill.
  4. Select Save and close.

Step 2: Enter the Supplier Refund in the Deposits screen

  1. Select + New.
  2. Select Bank Deposit. Here is where to find this: GB_Bank_Deposit
  3. In the Add funds to this deposit section, fill in the following fields:
    • Received from: Select or enter the Supplier name.
    • Account: Select the Creditors (Accounts Payable) account.
    • Amount: Enter the Supplier refund amount. Here is an example of a completed Bank Deposit:GB_Bank_Deposit_Completed
  4. Select Save and close.

Note: If your supplier refund comes through your automated bank feed, you don’t need to record it manually. Simply use the Add function to add the refund as a deposit, and categorise it to the Creditors (Accounts Payable) account.

Step 3: Link the Supplier Refund Deposit to the Supplier Credit

  1. Select + New.
  2. Select Expense or Cheque.
    Note: Both Expense and Cheque recognise and record expenses. When you use Cheque, the transaction adds to the list of cheques that you can print.
  3. In the Payee dropdown, select the supplier name.
  4. Leave the Ref/Cheque no., Payment date, Amount and Memo fields blank.
  5. In the Add to Expense or Add to Cheque section that appears on the right-hand side, select Add for the outstanding supplier credit and the deposit. Here’s a screenshot of where this is located: GB_Supplier_Credit_Deposit
  6. Select Save and close. You have successfully linked the Supplier refund with the Supplier Credit.

Scenario 2: If you want to apply a supplier credit to an outstanding bill, pay bills using supplier credits

Step 1: Enter the supplier credits

  1. Select + New.
  2. Select Supplier Credit.
  3. In the Supplier field, select the appropriate supplier name.
  4. Enter the Date, Amount, and Account (the account used here is typically the original expense account on the original bill). Here is an example screenshot below:GB_Supplier_Credit
  5. Select Save and close.

Step 2: Pay the bill using the supplier credits

  1. Select + New.
  2. Select Expense or Cheque.
    Note: Both Expense and Cheque recognise and record the expense. When you use Cheque, the transaction adds to the list of cheques that you can print.
  3. In the Choose a payee dropdown, select the supplier name.
  4. Leave the Ref/Cheque no, Date, Amount and Memo fields blank.
  5. In the Add to Expense or Add to Cheque section, select Add for the outstanding bill and the supplier credit. Here's an example for you:
    GB_Supplier_Credit_Deposit
  6. Select Save and close. You have successfully applied a supplier credit to an outstanding bill. The bill will now be marked as paid if you go back and open it.

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