How to apply vendor credit with no associated bill?

Probably enter them as bill credits. Then later when paying new bills, you can include them in the payment, reducing the payment.

Thank you for choosing QuickBooks as your accounting software, nsexton.

You can only apply credits to open bills. Hence, you can leave those credits in QuickBooks until you receive a bill from a vendor.

If the vendor has a balance, you can link those credits to bills. Applying credits to a bill can be done in just a few clicks.

1. Click on Vendors at the top menu bar.
2. Select on Pay Bills.
3. Choose the bill that you wish to be paid.
4. Click the Set Credits button at the bottom to apply credits.
5. Once done, click on Pay Selected Bills.

If you receive refunds from vendors, QuickBooks has different ways how to apply it to your bills. Check out this article for additional information: Record a vendor refund in QuickBooks Desktop.

Also, when dealing with your expenses, you may need to follow the right way of tracking the money you owe vendors. Please browse this article: Learn about the Accounts Payable workflows you can use in QuickBooks Desktop.

Keep me posted by replying to this thread if you need anything else. I'm always glad to help and answer your questions.

Thank you for the responses. 

Unfortunately this is what I attempted to do but as mentioned in the post I do not want to apply the credits to bills that need to be paid, that do not have anything to do with these credits. This will confuse the vendor which I would like to avoid. 

The transactions are already in as bill credits. Yet when I go to Pay Bills, my only option is to set the credits against bills that are not associated with these credits. 

@nsexton  If you're going to have those credits sitting there, they will show up for you to use on those current and future payments to your vendors.  If you don't want to use them for anything that you are paying, you don't have to. Uncheck them.   They will just continue sitting there.  

I would like to use the credits. But I do not want to apply them to bills that are not associated with these credits.. These bills that are associated will never be entered into Quickbooks as they were paid out of our old system. 

I'll share some tips in handling that transaction, nsexton.

Vendor credits are applied to the open bills to reduce the amount you owe to your suppliers. Since you don't want to apply the credits to the unrelated bills, you'll want to record them as a refund instead. You can start by entering a deposit for the credit:

1. Go to the Banking menu, then select Make Deposits.
2. In the Make Deposits window, choose the correct vendor.
3. In the From Account drop-down menu, select the appropriate Accounts Payable account.
4. Enter the actual amount of credit and the other necessary information.
5. Select Save & Close.

After that, create a vendor credit for the amount of the check:

1. Go to the Vendors menu, then choose Enter Bills.
2. Select the Credit radio button, then enter the Vendor name.
3. Head to the Expenses tab, then select the account you would normally use for refunds
4. Enter the amount, then click Save & Close.

Once done, follow these steps to link the two transactions together:

1. Go to the Vendors menu, then choose Pay Bills.
2. Check the deposit that matches the check amount.
3. Select Set Credits, then apply the bill credit you created earlier.
4. Click Done, then hit Pay Selected Bills.

If you need more help in recording your other vendor transactions, just tag me in the comment section. I'll always have your back.

I have credit memos that need to be applied to vendor bills. The original invoice was paid, later on the vendor credit memo came in. We use bill pay on line thru quickbooks and melio.. How do i apply a vendor credit?  i have searched everywhere and cant find a solution.

Welcome to the Community, @Hoity Toity.

Let me help you with your concern about applying a credit memo to your vendor bills in QuickBooks Online.

Since you mentioned that the bill had been paid before creating the credit, this vendor credit can no longer be applied to that specific bill. However, you can use this instead for future transactions you will have.

To create a vendor credit:

1. Click the Create menu (+) and select Vendor Credit.
2. Enter the vendor name and the credit details for the vendor. Make sure the amounts are positive.
3. Click Save and close.

You can use the vendor credit as payment for an open bill. Here's how you can apply it to the open bill:

1. Open the bill you want to pay.
2. Click the Make payment button.
3. In the Bill Payment window, the bill is marked in the Outstanding Transactions section.
4. Go to the Credits section and mark the vendor credit.
5. Click Save and close.

You'll want to check out this article for more details: Applying vendor credits.

Please don't hesitate to leave a comment below if you need further assistance. I'm always here to help.

This answer could actually answer the question of "how to" within QB.   Not sermonize on an accounting point of view.  The point is the business wants the CM to be part of their vendor data so they can be reminded when they do receive an invoice from that vendor.  There is no reason why one could not establish credits without having to associate with a bill.  While typical, the QB authoritarian structure is its primary flaw.  That is the answer.  The accountant wants a program to accomplish accounting the way the accountant sees it.  Not how Intuit sees it.  How ironic that "Intuit" operates in an authoritarian manner, contrary to the intuition of its customers.  OK, off my soapbox.

RE: This answer could actually answer the question of "how to" within QB. Not sermonize on an accounting point of view. 

What answer are you referring to?

RE: There is no reason why one could not establish credits without having to associate with a bill

Yes, that's correct. You're free to enter bill credits when there are no bills to pay - or no bills at all in the vendor's history.

RE: While typical, the QB authoritarian structure is its primary flaw. That is the answer.

I can't think of a flaw. What flaw are you seeing?

RE: The accountant wants a program to accomplish accounting the way the accountant sees it. Not how Intuit sees it. 

What is QuickBooks not letting you do the way you see it?