Offset vendor credit against vendor invoice

Good day, lsefcik.

You can use the vendor credit as payment to your vendor's open bill. 

To apply the existing credit to an open vendor transaction, use the Pay Bill feature. Here’s how:

1. In the left menu, click the + New button.
2. Select Pay Bills.
3. Choose the vendor from the list.
4. Once selected, the vendor's existing credit populates on the Credit Applied column.
5. Hit Save and close to apply the credit to the vendor open balance.

You may also follow below another step to use the vendor credit as payment for an open bill:

1. Locate and open the bill you want to pay.
2. Click the Make as paid 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. Hit Save and close.

To know more about vendor credits, take a look at this article: Enter a credit from a vendor. 

You may also find this helpful: Enter and pay bills. 

Let me know if you have any other questions concerning QuickBooks. I’m always here to help. Have a nice day!

Thank you for this very simple solution.  I was on with chat help for over 15 min and all I got as a takeaway was that they were trying to sell me a training class!  From now on if I have a simple question I will just post it here.  Also, this should be a simple solution that comes in when you type in "offset vendor invoice against vendor credit", but you should see what came up that didn't come close to addressing my question.

I appreciate your quick and accurate response!

Hey there, @LSefcik1.

Thanks for following up with us and letting us know that the solution provided by my colleague above worked for you. 

Please know you can reach out to the Community at any time. We're always here for you. 

Take care and enjoy the rest of your week. You certainly deserve it!

How do I offset a credit on an invoice the vendor will need to pay?

Hello there, Sonja8.

I'll guide you on how you can apply credits to a vendor's invoice/bill in QuickBooks Online.

In QuickBooks Online, vendor credits and refunds can be handled in different ways. It all depends on how you keep track of your purchases. You can follow the steps below to track credits applied to a vendor bill:

To create a vendor credit:

1. Click on + New.
2. Select Vendor credit or Receive vendor credit.
3. In the Vendor ▼ dropdown, choose your vendor.
4. Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for. 
5. Once done, hit Save and close.

To apply the vendor credits to a bill:

1. Click on + New.
2. Choose Pay bills or Pay bill.
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. Complete the rest of the fields like you normally do.

I've included this article to learn about additional ways to deal with vendor credits and refunds: Enter vendor credits and refunds in QuickBooks Online.

You can also visit our help page for the other related topics and relevant articles you can use in managing vendor transactions: Expenses and vendors

If you need assistance with vendor-related transactions, please tag my name and leave a comment below. Take care and enjoy the rest of your week.

How would you apply a specific credit note to a specific supplier invoice? for example you bought 5 apples off dave, 3 were rotten so returned them for a credit note. On a different day you had also bought 5 bananas & 1 was rotten so returned it for a credit note. Dave sent the invoices at the end of the month. So how do you apply the right credit note to the right transaction? Rather than just having a blanket amount come off? 

I'll show you the correct way how to apply for the specific credit note, ensuring it is correctly applied to a particular supplier invoice/bill, WishingDesktopWasStillAround.

In QuickBooks Online, you can easily allocate a specific credit note to a supplier invoice by creating an Expense and applying the credit note to the corresponding invoice/bill. Here's how:

1. Click the +New icon and select Expenditure.
2. Locate the supplier, Dave, and find the invoice/bill for the 5 apples. Then click Add.
3. A list of available supplier credit notes will appear. Select the supplier credit corresponding to the 3 rotten apples and click Add.
4. The credit note amount will now be applied to the invoice/bill, reducing the total balance due accordingly.

After adding a bill, the page will be directed to Bill Payment. 

Then, you can repeat the same process for the supplier invoice/bill related to the 5 bananas, applying the supplier credit for the 1 rotten banana to that specific invoice/bill. For more details, check out this article: Handle supplier refunds and credits in QuickBooks Online.

Moreover, I've also added this article if you want to track payments made by your customer or vendor: Run Reports In QuickBooks Online.

Let us know if you have more questions about recording vendor refunds or credits. We'll get back to you. Take care, and have a great rest of the day.