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Turn an invoice into a bill credit for a customer who is also a vendor

SOLVEDby QuickBooksQuickBooks Point of Sale3Updated December 01, 2022

The following steps are done within QuickBooks Desktop Point of Sale and QuickBooks Desktop. Ensure that financial integration is properly set up.

In Point of Sale:

  1. Create a new customer.
    1. From the Customers menu, click New Customer.
    2. In the name field, enter the vendor's name.
      NOTE: To differentiate the customer name from the vendor name, you may use a naming convention such as "-C" following the customer's name. For example: John Smith-C.
    3. Click Save.
  2. Create a new sales receipt.
    1. From the Home screen, click Make a Sale.
    2. Select the items that will generate the bill credit.
    3. Select the customer you created in Step 1.
    4. Click Account, accept the charge and complete the receipt normally.
  3. From the Financial menu, click Update QuickBooks to send the transaction to QuickBooks Desktop.

In QuickBooks Desktop:

  1. Create a Bank account called Clearing Account.
    1. From the Lists menu, click Chart of Accounts.
    2. In the Chart of Accounts window, right click anywhere and click New.
    3. Choose Bank for the Account Type.
    4. In the Account Name field, enter Clearing Account.
    5. Click Save & Close.
  2. Create two journal entries.
    1. From the Company menu, click Make General Journal Entries.
    2. Credit Accounts Receivable and debit the Clearing account (created in Step 1) for the amount of sale.
    3. In the Name field on the Accounts Receivable row, enter the customer name created in QuickBooks Desktop Point of Sale.
    4. Click Save & New.
    5. Create a second general entry. This time, credit Clearing Account and debit Accounts Payable for the amount of the sale.
    6. In the Name field on the Accounts Payable row, enter the vendor name that needs the bill credit created.
    7. Click Save & Close.
  3. From the Vendors menu, select Pay Bills and apply the credit to a bill.

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