Trying to apply a Credit note to an unpaid invoice (bad debt) - for QB online but there doesnt appear to be anywhere to apply a specific credit note to a specific invoice

if you do a help search for "Write off bad debt in QuickBooks Online" the instructions are : 

Step 5: Apply the credit note to the invoice

1. Select + New.
2. Under Customers, select Receive payment or Receive invoice payment.
3. From the Customer ▼ dropdown, select the appropriate customer.
4. From the Outstanding Transactions section, select the invoice.
5. From the Credits section, select the credit note.
6. Select Save and Close.

Point 5 on the list as far as I can see does not exist - where is the Credits section on the page?

yes, great thanks- that was the what I was missing!

I'm glad that my colleague was able to help you, cc3.

If there's anything we can help you with, don't hesitate to visit the Community again. It's always our pleasure to assist you.

Cheering you and your business to continued success!

We use a PEO to pay our vendors.  I schedule a payment to go to a vendor for 500 and they paid it however, they only deducted $400 from our bank because in the same transaction they issued a refund to us of $100 for a totally different transaction.  How can I mark the original bill of $500 with the bank feed of $400?  it leaves a balance of $100 and I'm not sure how to clear it.

Thanks in advance 

I've got you covered, @test32.

You can create an expense for the issued refund from your vendor to clear out the balance. Let me guide you through the process.

1. Sign in to your QuickBooks Online (QBO) account.
2. Click the + New button, then select Expense.
3. In the Category details section, choose the Accounts Payable account in the Category drop-down.
4. Enter the amount of the refund.
5. Click Save and close.

Most importantly, I recommend seeking help from your accountant for more guidance on recording this. If you don't have an accountant, you can find one through this link: Find an accountant.

As always, feel free to visit our QuickBooks Community help website if you need tips and related articles in the future.

Please know you can continue to reach me here with any additional questions. Thanks for coming to the Community, wishing you continued success.

it didn't work.  I need to apply the refund from vendor 1 to vendor 2.  How can I do that?

Thanks for getting back to us, @test32.

There isn't an option to match a bill with a different amount from the downloaded transaction.

Although, you can exclude the downloaded banking transaction and manually track the payment inside QuickBooks.

Here's how to exclude:

1. Go to the Banking menu, then select the Banking tab.
2. Click the For Review tab.
3. Select the checkbox of the transaction to exclude.
4. Click Exclude.

Once done you can now record the bill payment. If you want to enter a refund from a vendor and apply it to the bill, simply follow the steps in this article: How to record a refund from a supplier in QuickBooks Online.

To transfer the refund from one vendor to another, simply edit vendor credit and change the vendor name. 

Each time you record a payment, it shows up on the Expenses menu. The bills are marked as paid and checks are prepared for printing.

Moreover, you can run some basic financial reports in QuickBooks to get a snapshot of your business. This way, you can easily review the transactions that you've created in your account.

Please keep me posted if you have any other concerns about this process. I want to make sure everything is taken care of for you. You can reach out to the Community at any time. Take care and have a great day!