How to apply a credit card credit to Vendor account

Thanks for getting in touch with the Community, SWyatt502. I appreciate your detailed information.

When recording vendor refunds on a credit card, your Payee field will be used to track the appropriate vendor in step 3. This applies the credit to that vendor's profile. A Bank/Credit account will be selected in step 4. This is the card where you received your refund to. In step 5, a Category will also be entered. This is the original expense account used on your paid bill.

After completing step 6 to Save and close the credit card credit, you'll be finished recording your vendor refund on the credit card. No further steps need to be taken.

I can certainly understand how an ability to apply credit card credits to paid bills could be useful and have submitted a suggestion about it as of today.

You can also submit your own feature requests while signed in.

Here's how:

1. Use the Gear icon, then go to Feedback.
2. Enter your suggestion(s) in the Have feedback? window.
3. If necessary, attach a file with your Camera icon.
4. Select Next.
   
   

Your feedback's definitely valuable to Intuit. It will be reviewed by our Product Development team and considered in future updates. You can stay up-to-date with the latest news about your product by reviewing Intuit's Product Updates webpage.

If you're unsure of why you're seeing a negative open balance, I'd recommend working with an accounting professional. In the event you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

I'll be here to help if there's any additional questions. Have a lovely Wednesday!

@ZackE thanks for the response but it didn't solve anything.  I followed all the steps.  That's what I explained in the OP.  However, the account summary still shows -$456.06 on the vendor account.  It's like I STILL have a credit outstanding.  It recorded the credit, but didn't apply it.  

@Rainflurry Of course!  Thank you so much for that reminder.  That was exactly what I missed. 

The directions I found said to lable the credit exactly as the original invoice.  I should have known better. 

Thanks for helping me figure this out.   

Hi! I came here to find this same answer - but isn't this creating then a 2nd invoice for the same transaction - I can't understand how that would be right. in my preivous software if you had a credit on the book & received a refund -there was a command for receive refund & you select the account or card it went to - seems more logical & correct. Can anyone help me make sense of the 2nd invoice solution? thanks

Hi I came here to with the same issue. I am not understanding how creating a 2nd invoice is correct from an accounting standpoint since I already have an invoice.  In my previous software, we would select the credit on the books for that vendor & say "receive refund" that was hte command & then chose the account or card it went into to.

That makes more sense to me than creating a 2nd invoice - can anyone help me make sense of that 2nd invoice solution. thank you!

Let me clarify why they use the credit card credit feature, Jill. Below are the details to help you understand the process.

Are you referring to the steps provided above? If so, the workaround that was performed is intended for the scenario that was shared by the original post.

Since they want to apply the credit card credits to the bill (already overpaid), they have to select an Accounts Payable account to clear the vendor balance. Using this account will create a vendor payable balance (equivalent to a bill) that can offset the overpayment. Then, link them by using Pay bills. Even though you aren’t paying a bill, this is the right thing to do. This last step is to keep your vendor expenses accurate.

Moreover,  there are other ways to manage and record a refund or credit from a vendor in QuickBooks. You can check the link for more detailed instructions: Enter vendor credits and refunds in QuickBooks Online.

In addition, we have QuickBooks Live Expert Assisted that is always available to help you with best practices in setting up and making the most out of QuickBooks Online.

If you need to run reports specifically for your credit card accounts, QuickBooks Online offers the Transaction Detail by Account report. This report breaks down each transaction made in each account you've set up within your QBO account.

We look forward to hearing back from you. Please keep in mind that we're always here to assist you with any questions or concerns about applying for credit card credit or other transactions. Keep safe always.

@JillatMerch 

"I am not understanding how creating a 2nd invoice is correct from an accounting standpoint since I already have an invoice."

The second invoice ("bill" in QB terminology) is just a tool to tie the $456.06 overpayment made on the original bill from the original invoice to the CC refunds.  In QB, it's necessary to create a "bill" (A/P credit) to tie it to the A/P debit created by the overpayment on the original bill.  It would be great if you could just go to a vendor credit (A/P debit) and close it out as your previous software did but, in QBO, you need to use a form (Bill, Expense, etc.) to create the offset and then tie them together by using New > Pay bills.   

The journal entries through the process are as follows:

The prepayment:

Then, after the event, when the bill was received from the hotel:

At this point, expenses are correct but we have a $456.06 debit balance in A/P that is showing in the vendor account.  The OP created credit card credits and assigned them to an expense account.  THAT WAS INCORRECT.  

The CC credits should have been assigned to A/P since that will offset the A/P debit balance.  It's at this point, that you go to New > Pay bills and apply the "bill" created by the refunds to the "credit" created by the overpayment.  In QB, as you mentioned, crediting A/P does create a "bill", but that's necessary to close out the vendor credit (A/P debit) created by the original overpayment.  I hope I explained that well enough.   

@JillatMerch 

EDIT:

The second invoice ("bill" in QB terminology) is just a tool to tie the $456.06 overpayment made on the original bill from the original invoice to the CC refunds.