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Level 2

How do i post a credit from a vendor for a specific customer of mine?

My vendor is taking responsibility of defect product. I received credit from the vendor for my customer. I do I post the credit from the vendor for a specific customer?

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Best answer 01-03-2019

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Level 15

How do i post a credit from a vendor for a specific customer of mine?

You never use a JE when Names are involved.

 

A Vendor Credit is an Enter Bill, changing it to Credit/Return. Now you can list the Items here, and job track it. If you need to pass this to the customer on the next invoice or as a reduction on a sales receipt, mark it Billable. If you have no further charges for the customer where you can use this for a reduction of what they need to pay you next time, then mark this Not Billable and make a Credit Memo for the customer manually, using the same item. The Credit Memo provides for issuing the customer a refund of this amount. Don't use both methods; the Billable status is so that you can select it next time you use Add Time & Costs. The Credit Memo is because you don't intend to do any further charges to the customer using Add Time & Costs.

 

A JE bypasses customer and vendor center, bypasses cash vs accrual basis, bypasses the use of Items (but the Job Reporting relies on the use of items), bypasses affecting Purchase and Sales reporting, bypasses your ability to manage Sales taxes for the activity, and will not provide for using Quantity, either. A JE bypasses Job reporting provisions.

 

You don't need a Barter account, either. There is no "let's avoid trading funds" activity here. Everything is provided as part of Vendor entries and Customer entries and regular Banking activities.

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QuickBooks Team

How do i post a credit from a vendor for a specific customer of mine?

Welcome to the Community, Mberry.

 

You've come to the right place. It would be my pleasure to help you transfer the credit from the vendor to your customer.

 

A good way to handle this is to set up a Barter account and then make a journal entries to move the credit. The steps below will guide you through that process:

 

To create the barter account

  1. From the Lists menu, select Chart of Accounts.
  2. Click the Account drop-down menu and choose New. You could also press CTRL + N.
  3. Select Bank, then hit Continue.
  4. Enter the Account Name.
  5. Click Save & Close.

To record the entry to move the credit to the Barter account

  1. From the Company menu, select Make General Journal Entries.
  2. On the first line, credit Accounts Payable with the amount to be transferred.
  3. In the Name column, enter the vendor from whom the credit is coming.
  4. On the second line, debit the Barter account with the same amount.
  5. Click Save & Close.

To record the entry to transfer the credit to the customer

  1. From the Company menu, select Make General Journal Entries.
  2. On the first line, debit Accounts Receivable with the amount to be transferred.
  3. In the Name column, select the customer who will receive the credit.
  4. On the second line, credit the Barter account.
  5. Click Save & Close.

I'm also including an article for more information about this process: How to record a barter transaction

 

Just a heads up, this method can impact your books and you may wish to seek additional guidance from an accounting professional. Every business is unique and they can make suggestions on how to handle this. If you're not affiliated with one, our Intuit Find-A-ProAdvisor site can help you to find certified professionals in your area.

 

Don't hesitate to reach out to me here in the Community with any additional questions or concerns you may have. Thanks for dropping in, wishing you and your business only the best.

Highlighted
Level 15

How do i post a credit from a vendor for a specific customer of mine?

You never use a JE when Names are involved.

 

A Vendor Credit is an Enter Bill, changing it to Credit/Return. Now you can list the Items here, and job track it. If you need to pass this to the customer on the next invoice or as a reduction on a sales receipt, mark it Billable. If you have no further charges for the customer where you can use this for a reduction of what they need to pay you next time, then mark this Not Billable and make a Credit Memo for the customer manually, using the same item. The Credit Memo provides for issuing the customer a refund of this amount. Don't use both methods; the Billable status is so that you can select it next time you use Add Time & Costs. The Credit Memo is because you don't intend to do any further charges to the customer using Add Time & Costs.

 

A JE bypasses customer and vendor center, bypasses cash vs accrual basis, bypasses the use of Items (but the Job Reporting relies on the use of items), bypasses affecting Purchase and Sales reporting, bypasses your ability to manage Sales taxes for the activity, and will not provide for using Quantity, either. A JE bypasses Job reporting provisions.

 

You don't need a Barter account, either. There is no "let's avoid trading funds" activity here. Everything is provided as part of Vendor entries and Customer entries and regular Banking activities.

View solution in original post

Highlighted
Level 3

How do i post a credit from a vendor for a specific customer of mine?

I am using Desktop pro. Single member LLC

I received a credit from a vendor in the form of direct deposit, this credit is not tied to any invoice or product. When matching my bank feeds, I entered the credit from the vendor, to my accounts payable. So now I have the credit amount showing as a balance in my AP. What are the steps now to record this so my AP balance is 0? I was told through chat to enter a journal entry for this, but I am not sure how to do so.

Highlighted
QuickBooks Team

How do i post a credit from a vendor for a specific customer of mine?

Hi there, quinn1.

 

It shows a balance in your Accounts Payable because the refund was not tied to a transaction or item. Was the credit sent because of a rebate, reward incentive, refund, or reimbursement? If so, follow these steps to properly record the transaction and zero out the balance in your AP:

 

Record a Bill Credit for the amount of the Vendor Check

 

  1. Go to the Vendors menu and select Enter Bills.
  2. Select the Credit radio button to account for the return of goods.
  3. Enter the name of the vendor.
  4. Proceed to the Expenses Tab and enter the Accounts you would normally use for refunds. If you're not sure which account account to select, we recommend reaching out to your accountant to make sure the transaction is recorded properly.
  5. Enter the amount in the Amount column for each accounts.
  6. Click Save & Close.

Link the Deposit to the Bill Credit

 

  1. Go back to the Vendors menu and select Pay Bills.
  2. Check the deposit that matches the vendor check amount.
  3. Click Set Credits and apply the Bill Credit you created earlier, then click Done.
  4. Click Pay Selected Bills.
  5. Click Done.

More options are also available here depending on the reason why the credit was sent: Record A Vendor Refund In QuickBooks Desktop.

 

The Community is always here if you have other questions. 

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