Credit Notes

Hi there, @Growingtree. I'm here to help you record the credit note received from your vendor in QuickBooks Online (QBO).

In QBO, there are several ways you can enter the credit note depending on how you record your purchases.

If this is a credit note with no expense occurring. You can enter a vendor credit and create a bank deposit. Then, use the Pay bills option to connect them. Here's how:

Create a vendor credit:

1. Navigate to the + New button.
2. Then, select Vendor credit or Receive vendor credit.
3. Next, in the Vendor dropdown, choose your vendor.
4. Depending on how you record purchases with this vendor, enter the Category details or Item details.
5. Click Save and close.

After that, enter a bank deposit:

1. Go back to the + New button. 
2. Click Bank deposit.
3. Next, in the Account dropdown menu, select the account where you got the refund.
4. Then, in the Add funds to this deposit section, fill out the needed fields.
5. When done, click Save and close.

Then, connect the two transactions via Pay Bills feature. This last step is to keep your vendor expenses accurate. For detailed steps, follow the Deposit a vendor credit when no expense has occurred section of this article: Enter vendor credits and refunds in QuickBooks Online. 

Before performing the recommendation above, I recommend reaching out to your accountant for additional guidance in recording the transaction. This is to ensure you'll account for the transaction correctly. If you don't have one, you can use the Find an Accountant tool to look for one near your area. 

I'll include this helpful resource that you can use as a guide in managing your vendor transactions in QBO: Enter and manage bills and bill payments in QuickBooks Online.

I'm just around the corner to help if you have any other concerns about managing credit notes from vendors in QBO. Have a good one and stay safe.