How to apply a vendor credit when paying via ACH?

Hi there, @larryfine. 

In QuickBooks Online (QBO), we have to link the vendor credits to your bills first and then apply the balance using Online Bill Pay.  

Here's how: 

1. Go to the + New button.
2. Click Pay bills.
3. Select a bill for your vendor from the list. You'll see the available credit with this vendor in the Credit Applied field.
4. Fill out the necessary information. 

Here's an article for more info: Enter vendor credits and refunds in QuickBooks Online. 

Furthermore, check out this article to learn how to manage your transactions in QBO: Void or refund transactions in QuickBooks Payments. 

If you've got questions about handling vendor credits in QBO, hit the Reply button. Keep safe! 

Thank you for the reply. Unfortunately, the instructions you supplied do not apply for paying via ACH. When following the instructions, the user experience provides an affordance for paying via check, but not for ACH.

To reiterate, here is my use case scenario:

1. I have a vendor credit for x dollars already entered into QuickBooks online.

2. I want to apply the credit to an open invoice from the vendor.

3. I select New -> Pay Bills and the Pay Bills window displays.

4. From the Pay Bills window there's Starting Check text box, but no affordance that allows me to specify ACH as my payment method. I use ACH payments for my vendors, so that won't work. 

5. Result: I cannot apply a vendor credit for a bill payment I wish to pay using ACH.

Does QuickBooks Online Bill Pay not permit users to apply vendor credits when paying a bill via ACH? 

Thank you for the reply. Unfortunately, the instructions you supplied do not provide a way to (a) apply a credit to an open bill, and (b) pay the bill via ACH. 

To reiterate, here is the use case scenario:

1. I have a vendor credit.

2. I have an open bill for the same vendor.

3. I want to apply the credit to the open bill, and pay the bill via ACH.,

4. I select New->Pay Bills, and the Pay Bills window displays.

5. In the Pay Bills window, there is a Starting Check text box, but I do not pay my vendors using checks: I use ACH. There is no affordance for applying a credit to a bill and then paying the bill via ACH.

6. Result: I cannot (a) apply a credit to an open bill and then pay the bill via ACH.

Question: does QuickBooks Online allow me to pay a bill with a credit applied via ACH? 

Hi there, @larryfine. Let me chime in and add some clarifying details about this matter.

In QuickBooks Online, there's no option to apply the vendor credit when using QuickBooks Bill Pay. Since you have a vendor credit, I recommend appying it first to the bill to deduct the payments from the acctual bill. Once this is applied, you can schedule a partial bill payment with Bill Pay so you can process the ACH payment.

Furthermore, you can also view and edit vendor transactions in QuickBooks Online. This provides you with the list of vendor transactions made and their details.

Let me know if you have other questions about applying vendor credit to pay bills via ACH. I'll be here ready to provide you with the assistance you'll need. Have a great day!

Actually, the instructions you supplied fail to work.

Selecting New -> Pay Bills, the Pay Bills window displays. In the Pay Bills window, clicking a Credit applied text box and typing in a value decrements the balance, per the value of the credit. That makes sense. But then there are three options in the drop-down menu in the bottom right of the screen: Save and close, Save, and Save and print. None of the options allow me to pay via ACH.

• Save and Print: displays a window for printing checks and lacks a schedule online payment button.
• Save: closes the Pay Bills window and returns to the main screen. The bill is marked paid, and a check number is provided, but there's no way to indicate that this should be paid via ACH.
• Save and close: not sure what the difference is between this and Save, as the functionality is identical.

What am I missing here?

In addition, is there a use case for not simply providing a Credit Applied text box on Expenses -> Bills -> Unpaid? That's the sensible way for managing credits in QuickBooks Desktop.

I can see the importance of selecting an ACH payment method when applying vendor credits to vendor bills, @larryfine.

Currently, this ability is not available in QuickBooks Online (QBO). As a workaround, you can enter ACH Payment in the Starting check no. field as the payment's identifier. 

I appreciate you sharing your ideas about adding this option. We'd love to hear more of your insights regarding this so I recommend sending feedback to our product developers. This way, they can further review which parts of the program need enhancements and consider adding them to future updates. Please refer to the steps below:

1. Open your QBO account.
2. Hit the Gear icon at the top, then select Feedback.
3. Type in your product suggestions.
4. Click Next to submit feedback.
5.  

Please know that while we can help you raise your voice and share your ideas, it's ultimately up to our engineering team to choose and prioritize new features. That said, we don't have a specific timeframe for when this option will be available. For the time being, you can visit our Customer Feedback page to keep track of your feature request.

Moreover, here's an article to help you manage bills inside QBO: Enter and manage bills and bill payments in QuickBooks Online.

If you have follow-up questions managing vendor credits or need assistance accomplishing tasks inside the QuickBooks program, leave a reply below. I'll be around ready to help you out. 

Thank you for the reply. You suggested a workaround that isn't really a workaround. 

Thank you for the reply. You suggested a workaround that isn't really a workaround. If I follow your suggestion, QBO will mark the bill as paid via a check with check number "ACH Payment." How would I actually pay the bill, as QBO considers it already paid? 

@larryfine 

How about this one?

In QuickBooks Online (QBO), click the + New button
Choose Pay bills.
On the Pay Bills screen, make sure Online payment mode is toggled OFF in the top left.
Checkmark the bill you wish to pay. QuickBooks will automatically apply the vendor credit.
Change the payment amount to $0.00.
Click Save and Close.
View the bill to see if it reflects the correct balance due after applying the vendor credit.
Click the Save and schedule payment button. The bill will be paid for the correct remaining balance.

Hi there, larryfine.

I see you wanted to ensure that vendor credits are applied when processing an ACH payment through QuickBooks Online Billpay. Let me clarify some details regarding the Billpay process and applying a credit to a bill.

Before we proceed, may I know if the vendor credit that you're trying to apply is the same amount as the open bill?

If the vendor credit applied is less than the amount that needs to be paid in an open bill, you can follow the steps provided by @4Gal above. This will give you the Save and schedule a payment option and process it as an ACH payment.

However, if the vendor credit you're trying to apply is the exact amount of the open bill, QuickBooks will normally mark it as paid. That means, QuickBooks will recognize the credit and consider the bill as paid in full.

I've added the following resources to learn more about the Billpay process and managing bills and bill payments:

• Learn about QuickBooks Bill Pay
• Enter and manage bills and bill payments in QuickBooks Online

Let me know if you still have follow-up questions or other vendor-related concerns. I'll be checking this thread for your response. Have a good one!

Thank you for the response. There is no button to toggle online payments on/off on the top left of the Pay Bills screen, as can be seen from this screenshot.

I know the possible reason why you don't have the toggle button on the Pay bills screen, larryfine.

The toggle button for online payments will not appear when you haven't set up Bill Pay on QuickBooks Online (QBO). Refer to the steps below to set this up:

1. Sign in to your QBO account and click Get paid & pay, then Bills.
2. Create a new bill or select an existing unpaid bill.
3. Select Schedule Payment or Save and Schedule Payment depending on what type of bill you’re reviewing. If you create a new bill, you'll have the option to schedule the bill right away by clicking Save and Schedule Payment.
4. For an unpaid bill, schedule directly from Expenses, Vendors, or Bills. 
5. Choose which bank account you want to use as your funding source and withdraw funds from. Banks already connected to your QuickBooks account will appear as options, but you can also choose Add a bank account. The full amount of the bill appears by default, but you can select Edit if you want to schedule a partial payment.
6. In the Payment account in QuickBooks dropdown, select the corresponding account from your QuickBooks chart of accounts to sync your payment information accurately in your QuickBooks Online account. Or, click + Add new to create a new account in QuickBooks to track your bill payment information.
7. Choose which payment method your payee prefers and complete the required fields.
8. For the Withdrawal date, select when you want the funds to be withdrawn from your bank up to 90 days in advance.
9. Review the payment instructions, then if everything looks correct, select Schedule payment.

Check out this article for further information about Bill pay: Learn about QuickBooks Bill Pay.

Moreover, I'll share another link to help you track bills and record payments: Enter and manage bills and bill payments in QuickBooks Online.

Comment below if you have additional questions about managing your bills. I'm here to help. Take care!

Thank you for your response. Unfortunately, your hypothesis is incorrect: I am subscribed to QuickBooks Bill Pay Premium and have indeed been paying my bills successfully using the service. At this point, it is clear to me that QuickBooks Online does not support applying credits to a bill and then paying that bill using ACH. I've spent several hours trying to get it to work, and everything that you and your colleagues have suggested to fails to work. This bit of functionality worked perfectly in QuickBooks Desktop, and I'm now regretting my decision to follow my accountant's recommendation to switch to QBO. This is very frustrating for me. 

Hi Larry: 

I finally came up with a work around that works for me.   I went to Pay Bills, where you  can only apply credits when the "Online Payment Mode" is turned off.  I applied the credits and entered the payments a zero.  When I went back to the Online Payment Mode, the net payment was there.  I added all the Invoice/Credit numbers to the description line for the Vendor.   It isn't perfect, but it worked when paying by ACH.  You also have the opportunity to change the amount to pay on an Invoice when paying online, but you would still have to go back and apply the credits to the Invoices.  

Best of luck.

Kathy C

@kathycooper0366 

It seems your workaround similar to ours. Thanks for the confirmation.

Trying to post an answer, but I keep getting an "Access Denied" message...

Trying to post a reply....

I’m having the same issue; I have two vendors that I regularly have credits that need to be applied when I pay the bills for them, so this is vital for me. I tried using the workaround posted here at the end of the thread, but I can't find a way to turn off the Online Bill Pay without canceling the subscription. There used to be a toggle button to turn it off, but it's gone now (or very well hidden)...

Anyway, I was able to create my own workaround; here it is, if it helps anyone else out. For some reason, my post gets an error message if I type the whole thing out here, so I had to upload a PDF of the write-up instead.

Questions? Pease let me know and I'll try to help you out.