Hi -
When entering a vendor credit on the Enters Bills screen, there are 2 tabs - Expense and Item. When setting up the vendor credit, how do you determine which GL account to use? In this scenario, these are parts that had already been bought and paid for using a PO. Later on, the vendor has given us a credit.
Can you list the steps on how to find which GL account was used for the PO transaction? I believe that will help us determine which GL account to list when entering the bill credit.
If it matters, we use QuickBooks Desktop Enterprise.
Note: To get to screen in QB for vendor credits, I went to menu bar Vendors - choose Enter Bills - near top of Enter Bills screen click the bubble for "Credit" - use drop down list to select the correct vendor. Then, you'll see the Credit screen, and 2 tabs below - Expenses , Items.
Thank you in advance for your feedback!
Hello there, Dav.
Thank you for outlining your approach to setting up your vendor credits. I'd like to offer additional insights to simplify the process of selecting the appropriate General Ledger (GL) account when recording a vendor credit in QuickBooks Desktop (QBDT).
To shed light on, when you enter a bill and apply for vendor credit, it really depends on whether you're going to record an item with vendor credit or not. If you're trying to enter a bill or vendor credit that involves a particular expense that doesn't include an item (credit for labor expense, consulting, professional expenses, etc.), you can use the Expense tab.
On the other hand, you can use the Item tab when you're recording a credit that includes an inventory item, non-inventory, or service item).
Thus, it is not necessary that both tabs are filled in since it will really depend on the nature of the expense that you're trying to apply for vendor credit.
Additionally, you can always refer to your previous post that my colleague GenmarieM has addressed with regard to the steps on how to find which GL should be used for Purchase Order (PO) transactions: How do I see which GL account is mapped to a Purchase Order?
Moreover, feel free to view this article to have further details on choosing the appropriate scenario, along with the steps how to record a vendor refund in QBDT: Record a vendor refund in QuickBooks Desktop
Furthermore, you can also read this article to learn how to generate vendor reports based on your business needs in QBDT: Customize vendor reports
Should you have any further questions with regard to managing your vendor expenses and credits in QBDT, feel free to revisit this thread. We're here to help you along the way.
POs are non-posting transactions so they don't hit any GL account. It's the bill you create when converting the PO to a bill that hits a GL account based on how the bill is entered. On the Items tab, inventory items hit your Inventory Asset account - non-inventory and service items hit the expense account listed in the respective item's set up. On the Expenses tab, the GL account listed is the account that gets hit and can be used on the vendor credit to reduce that expense. Ultimately, the proper GL account to use for a vendor credit depends on the reason for the credit and whether or not you returned items to the vendor.
Thank you @Rainflurry . Your feedback is very helpful and clear. Much appreciated!
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