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Themark
Level 2

recording and redeeming vendor credits when paying for inventory by check or ACH

This is for Quickbooks Desktop.

1. I purchase all inventory by debit card, so I enter the purchase using the "Write Check" option and typing ACH for check #.

Two Questions?

The vendor has issued a credit.

1.  How do I record the credit?

2.  How do I redeem the credit when using the "Write Check Option?

 

I know when purchasing by purchase order, to record a credit, you select "Enter Bill" and then select credit.  The credit then shows up when

Solved
Best answer December 07, 2020

Best Answers
katherinejoyceO
QuickBooks Team

recording and redeeming vendor credits when paying for inventory by check or ACH

Thanks for your follow-up questions, @Themark. I'm here to add more information on how to apply the vendor credit to pay bills.

 

To clarify, if the vendor charges you $450, and you have $50 credit, you'll use the $50 credit and paid the remaining $400 with a check. 

 

So, going back on recording the vendor refund, this is the flow that we are following:

  1. Create vendor credit.
  2. Create a bank deposit.
  3. Link the vendor credit and the bank deposit.

 

Here are the detailed instructions from Steps 1-3:

 

Create the Vendor Credit

 

  1. Click Vendors at the top menu and select Enter Bills.
  2. In the Enter Bills window, select the Credit radio button.
  3. Enter the refund details and click Save & Close.

 

Create the Bank Deposit

 

  1. Click Banking at the top menu, then select Make Deposits.
  2. Enter the details of the deposit (Deposit ToDate, and Memo), then select the vendor name in the RECEIVED FROM column.
  3. Select the Accounts Payable in the FROM ACCOUNT column.
  4. Enter the refund in the AMOUNT column.
  5. Click Save & Close.

 

This will now show as the amount due in the Pay Bills window. Finally, link the two transactions (vendor credit and bank deposit) to pay your bill. Here's how: 

 

  1. Click Vendors at the top menu and select Pay Bills.
  2. In the Pay Bills window, mark the amount due (bank deposit) we created earlier.
  3. Mark the Set Credit button. This will open the Apply Credits window.
  4. Go to the Credits tab and mark the available credit.
  5. Select Done.
  6. Ensure that the AMT. TO PAY column is zero (0.00).
  7. Enter other necessary details and click Pay Selected Bills.

 

You can also check out this article for more insights about applying vendor credit to a bill: Record a vendor refund in QuickBooks Desktop.

 

For future reference, you can also read through this article in case you'll want to remove or un-apply a credit from an invoice or bill.

 

Please get back to me if you require additional assistance in doing any of the steps above. I'd be here to back you up. 

 

 

 

View solution in original post

4 Comments
JessT
QuickBooks Team

recording and redeeming vendor credits when paying for inventory by check or ACH

It's good to know that your vendor is giving you credits, Themark.

 

I will guide you on how to enter your credit and how you can use it to pay for your inventory purchases.

 

When recording a credit, simply go to the Vendors menu and select Enter Bills. On the Bill page, there is an option for entering credits, as shown in the screenshot.

 

 

About your second question, vendor credits can only be applied to a bill. Therefore, if you paid inventory purchases via check (and credit), record the purchase as a bill first. Then, pay it with the vendor credit and a check.

 

For example, I purchased items amounting to $250, and I have a vendor credit amounting to $200. I can record the purchase as a bill, create bill payment, use the $200 credit, and pay the remaining $50 with a check. In case you use a debit card, just do the same thing and replace the check number with ACH or DEBIT or something similar to indicate that it's processed via ACH.

 

 

Let me know if you need more help regarding your vendor credits. 

 

By the way, if you want to see the references for QuickBooks Desktop, just press F1 on your keyboard. This will launch the Help menu, and you can search for the topics you like. Example: Vendor Credit.

 

Have a good one!

Themark
Level 2

recording and redeeming vendor credits when paying for inventory by check or ACH

Thanks for the quick reply JessT

Your explanation is pretty much the way I was thinking it needed to be done, I just needed some clarification since it was confusing me a bit.  I wasn't sure if there was a way to apply the credit if paying by check.  So yes, I will create a bill instead of write check. 

The part that was getting me confused is that when I initially create the bill it will need to be over what ever the credit amount is.  For example, if the vendor charges me $450 and then applies a $50 credit, the amount taken from my checking account will be $400.  So when I create the bill, I make it for $450.  Then when I pay the bill, I apply the $50 credit so it matches the $400 amount taken from my checking account.  Am I thinking of the process correctly?

Mark

katherinejoyceO
QuickBooks Team

recording and redeeming vendor credits when paying for inventory by check or ACH

Thanks for your follow-up questions, @Themark. I'm here to add more information on how to apply the vendor credit to pay bills.

 

To clarify, if the vendor charges you $450, and you have $50 credit, you'll use the $50 credit and paid the remaining $400 with a check. 

 

So, going back on recording the vendor refund, this is the flow that we are following:

  1. Create vendor credit.
  2. Create a bank deposit.
  3. Link the vendor credit and the bank deposit.

 

Here are the detailed instructions from Steps 1-3:

 

Create the Vendor Credit

 

  1. Click Vendors at the top menu and select Enter Bills.
  2. In the Enter Bills window, select the Credit radio button.
  3. Enter the refund details and click Save & Close.

 

Create the Bank Deposit

 

  1. Click Banking at the top menu, then select Make Deposits.
  2. Enter the details of the deposit (Deposit ToDate, and Memo), then select the vendor name in the RECEIVED FROM column.
  3. Select the Accounts Payable in the FROM ACCOUNT column.
  4. Enter the refund in the AMOUNT column.
  5. Click Save & Close.

 

This will now show as the amount due in the Pay Bills window. Finally, link the two transactions (vendor credit and bank deposit) to pay your bill. Here's how: 

 

  1. Click Vendors at the top menu and select Pay Bills.
  2. In the Pay Bills window, mark the amount due (bank deposit) we created earlier.
  3. Mark the Set Credit button. This will open the Apply Credits window.
  4. Go to the Credits tab and mark the available credit.
  5. Select Done.
  6. Ensure that the AMT. TO PAY column is zero (0.00).
  7. Enter other necessary details and click Pay Selected Bills.

 

You can also check out this article for more insights about applying vendor credit to a bill: Record a vendor refund in QuickBooks Desktop.

 

For future reference, you can also read through this article in case you'll want to remove or un-apply a credit from an invoice or bill.

 

Please get back to me if you require additional assistance in doing any of the steps above. I'd be here to back you up. 

 

 

 

View solution in original post

Themark
Level 2

recording and redeeming vendor credits when paying for inventory by check or ACH

Thank you to everyone for the hand holding.  I was thinking of the process correctly, I just needed some clarification. This one just tripped me up a bit.  Thank goodness for this wonderful community.  I have an accountant, but they would have charged me somewhere around $150. 

Mark

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