Apply vendor credit memo to bill that has already been paid

QBO needs to have the ability to apply a vendor credit to a bill that is already paid, in order to create an open balance, to pay the bill again. For example, bills paid via check directly from the bank, then reversed in a later month because the check never cleared. This hits your bank account when the check payment is ISSUED - Not when the check is cashed/deposited by the payee. Now when the new payment shows up in the bank feed, you are unable to apply it to the original invoice. Now I have to create a work around. I've brought this up before.

Hi there, @sooverit2. I can see the benefits of being able to apply credits to a paid bill to pay it back in case the bank reverses the payment. I'm here to share some information about it.

In QuickBooks Online (QBO), you can only apply a Vendor credit to unpaid bills. If it has already been paid, unlink the payment first to apply for credits.

That said, I recommend sending feedback to our product developers to request the addition of this feature. They will review your suggestions and consider adding them to future updates based on user demands.

Here's how:

1. In your QBO account, navigate to the Gear icon.
2. Next, select the Feedback option.
3. From there, enter the details of your product comments, suggestions, and requests. Example: Add the ability to apply a vendor credit to a paid bill.
4. Then, click Next to submit. 

When submitted, you track the status of the feedback through the QuickBooks Online Feature Requests website.

Additionally, you can view all the money you paid to a vendor for a specific date range by running the Transaction List by Date report in QBO.

Please know that you can always post your concern about managing bills here in the Community. I'm always ready to lend a hand. Have a good one, and stay safe. 

We do job costing and I have issues with trying to apply a vendor credit to an already paid vendor invoice. 

I cannot reopen a paid vendor bill and apply a credit, we sometimes get vendor credits months after we have paid their bill. If I apply the credit to a new vendor invoice the vendor says we short paid them for the new vendor bill. So I need to know how to apply a credit on a check without applying it to a new vendor bill. It is confusing to the vendor to have to do this this way. There should be a way to just put a credit in without having to apply it to a new vendor bill, is there any way to do this.

Thanks

TeresP2024 

@sooverit2 

RE: QBO needs to have the ability to apply a vendor credit to a bill that is already paid, in order to create an open balance, to pay the bill again.

I've tried to get my head around this, but can't. Credits don't work that way.

Instead, like Bill Payments, Credits reduce the bill amount due. For example, if you have a bill for $100 and a credit for $60 and you apply it to the bill, then there is only $40 left to pay.

Entering a Credit reduces the amount you owe the vendor. Applying it doesn't change that, and doesn't create a bill to pay again. Instead, a credit fully or partially removes bills to be paid.

If you have already paid a bill, then there is no way to apply a credit to it because that would cause it to be overpaid, which isn't really a thing.

If you want to apply a credit to a bill that's already been paid, that means that the payment should not have paid that bill (or part of that bill).  In this case, to fix your data, remove the payment's application from the bill, apply the credit, and then apply the payment again, presumably differently - as the bill is now partially paid with the credit.

@TeresaP2024 

"If I apply the credit to a new vendor invoice the vendor says we short paid them for the new vendor bill."

Then your vendor needs to update their process or send you a check instead of a credit.  That's what a credit is - an amount that you can apply to a future bill to reduce the balance owed.

As @BigRedConsulting mentioned, how can you apply a credit to a fully paid bill?  It's already been paid.  That's like going to the grocery store on Monday, paying for your groceries in full and then receiving a credit on Friday and having the grocery store tell you to apply it to your Monday purchase.  Good luck with that.