Created with Sketch.Learn about PPP and Loan Forgiveness, stay informed with the latest changes.
Created with Sketch.Questions about how to close your books for 2020? Visit our Year End Resources page.
Created with Sketch.New to QuickBooks or using a new product? Visit our Get Started resource page to help you get going.
Created with Sketch.Need to make changes to your account? Visit the Account Manager Portal.
Showing results for 
Search instead for 
Did you mean: 
Level 1

How to set credit against a purchase order in Quickbooks Desktop?

I ordered items through a Purchase Order (created in Quickbooks Desktop). I received part of those items and created a bill for it.  For the rest of the items remaining in the PO, I received a credit memo from the vendor since they no longer have the items. How do I post a credit against a purchase order to correct the item quantities in Quickbooks Desktop? Or do I need to update the PO directly to reflect the changes?

1 Comment

How to set credit against a purchase order in Quickbooks Desktop?

It's nice to have you here, @mdipchand,


I'll be glad to give you options on how to account for a refunded items in QuickBooks.


A purchase order is a non posting transaction and it doesn't add quantity to the inventory unless billed. If the ordered items are no longer available, you may delete the PO directly or adjust the quantity there to 0.


Posting a credit to a non-posting transaction in QuickBooks is currently not an option. You may assign them to posting entries like bills to show a reduction to the amount you pay to a vendor. Here's how:


  1. Go to the Vendors menu and choose Enter Bill.
  2. At the top of the bill, click the Credit radio button.
  3. Once the refund detail is complete, click Save & Close.
  4. When you want to apply the credit as a payment to a bill, go to the Pay Bills menu.
  5. Mark the bill you want to pay then select Set Credits.
  6. On the next window, mark the credit you created from the Credits tab.
  7. Hit Done and then Pay Selected Bills.

To explain how the credit works, see the following article: Record a vendor refund in QuickBooks Desktop


Let me know if you have any more questions about this. I'll be right here to help you. Have a good one!

Need to get in touch?

Contact us