How do I enter a vendor credit when they are sending me a check back

thank you -  I don't think I said the correct info  -   I have a vendor that sent me bills for different projects and then we had some returns and then the vendor double charged me so they took everything we owed that month and did a credit leaving me with a $1675.76 credit that they are sending me a check.     I'm not sure how enter those bills that were being paid by credit and refunds.   I understand that I should put the credit for the $1675.76 and then when the check comes match them but what do I do about my other bills/refunds/charges?

Thank you 

Thank you for getting back, @preferredcandc.

You can go ahead with recording the vendor credit, then apply it to your bill/s. I'm here to guide you with the detailed steps.

First, enter the credit:

1. Open your QuickBooks Online account, then click on Vendor credit from the (+) New icon.
2. Fill in the information on the Vendor Credit window (vendor name, date, item/account, amount).
3. Save the transaction.

If you haven't created the bill, enter it from the (+) New icon.

1. Go to the Gear icon, then select Bill under Vendors.
2. Enter the bill details.
3. Click on Save.

When you're ready to record the payment, you can follow these steps:

1. Tap on the Mark as paid button from the Bill window.
2. Select the bill from the Outstanding Transactions section.
3. Pick the credit from the Credits section.
4. Hit Save and close.

Here's an article you can read more about creating and managing credits from your vendors in QuickBooks.

You can also review the topics from our help articles for additional resources while working with QuickBooks in the future.

If you need additional help with recording bills and payments using the vendor credit or refund, please let me know by adding a comment below. I'm always here to help. Have a good one!

I did all the process but my vendor accounts it is showing an open balance balance :( Why?

Hello there, @imedrano.

I appreciate you for performing the steps shared by my peers above to record vendor refund. I'm here to help you ease the open balance that's showing up for your vendors.

You have to create a deposit to record the refund, then generate a bill payment and link it to the refund afterward. This way, the open balance will be removed from your vendors' accounts.

To enter the refund as a deposit:

1. Click the New + icon.
2. Choose Bank Deposit.
3. Under Add funds to this deposit, choose the vendor name in the Received from field.
4. Choose Accounts Payable in the Accounts field, then enter the credit/refund amount in the Amount field.
5. Select Save and close.

To apply the existing credit to an open vendor transaction, use the Pay Bill feature.

Here’s how:

1. Go to the New + icon and select Pay Bills.
2. Choose the vendor from the list.
3. Once selected, the vendor's existing credit populates on the Credit Applied column.
4. Hit Save and close to apply the credit to the vendor open balance.

Refer to this article for more information managing bills in QuickBooks Online: Enter and pay bills.

Let me know if you have any Questions after following those steps. I’m always here to help. Have a good one!

When you + New and Pay Bill, the Bank Deposit is there to choose but the Vendor Credit is not there to balance against on the screen.

UPDATE: Never mind. I used to see a credit at the bottom. However, in this case, both the bill pay and credit applied are on the same line. (just different interface) Actually, this resolved the issue.

Hello there, @ytkom.

I got you covered in managing your vendors' credit in QuickBooks Online.

You'll need to make sure that you've created a vendor credit already. This way, it will show up upon linking the vendors transaction.

To do that:

1. Select + New.
2. Select Vendor credit or Receive vendor credit.
3. In the Vendor dropdown, select 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. Click on Save and close.

If you've generated a vendor credit already and it's not showing up in the list of credits, I'd recommend searching the transactions from the Audit Log. In this area, you can see who made changes to your books and what they did. 

Here's how:

1. Go to the Gear icon and select Audit Log.
2. Select Filter.
3. Use the fields on the Filter panel to choose the appropriate User, Date, or Events filter to narrow the results.
4. Select Apply.

To guide you in utilizing the Audit Log feature in QBO, you can refer to the article: Learn what the audit log can do and how to use it to keep an audit trail.

From there, review the transaction and make sure that the you've selected the right vendor.

To give you more tips about managing vendor credits and recording cash backs in QuickBooks Online, please check out these links:

• How can I record a cash back to my credit card account?
• Learn how to record a refund from a vendor in QuickBooks Online

Let me know if you have any other concerns with recording vendor credits in QBO. I'm always ready to help. Take care!

I am having this same issue, but I am on QB desktop, not online, so I can't follow the same steps. 

Vendor charged us $7,834.57 to our AMEX. The bill ended up only being $6,687.92. The balance is sitting in their vendor account as a credit, however, they actually refunded the difference of $1,146.65 to our credit card, so it actually isn't a credit with the vendor. I would like to fix this in QBD to show it accurately. Please help!

Good day, @katrina10.

I'd be glad to help you in accomplishing your task in QuickBooks Desktop (QBDT). 

Let me walk you through the process on how to record your vendor refund. If they send you a refund check for a bill that is already paid, simply these steps:

First, record a Deposit of the vendor check:

1. Go to the Banking menu, and select Make Deposits.
2. If the Payments to Deposit window appears, click OK.
3. select the Received from drop-down list in the Make Deposits window and choose the vendor who sent you the refund.
4. In the From Account drop-down, select the appropriate Accounts Payable account.
5. In the Amount column, enter the actual amount of the Vendor check.
6. (Optional) Enter a memo, check number, payment method, and class.
7. Select Save & Close.

Once done, record a Bill Credit for the refunded amount:

1. From the Vendors menu, select Enter Bills.
2. Click the Credit radio button to account for the return of goods.
3. Enter the Vendor name.
4. Select the Expenses tab and enter the Accounts on the original bill.
5. In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated).
6. Click Save and Close.

Finally, link the deposit to the Bill Credit:

1. Go o the Vendors menu, select Pay Bills.
2. Check the Deposit that matches the Vendor check amount.
3. Select Set Credits and apply the Bill Credit you created earlier then select Done.
4. Click Pay Selected Bills, then select Done.

For more info, you can also check out this article on how to record vendor refunds depending on the appropriate scenarios: Record a vendor refund in QuickBooks Desktop.

Additionally, you can run reports such as Purchases by Vendor Summary or Purchases by Vendor Detail. These will show you the company's total purchases per vendor. Or else, open the Transaction List by Vendor report. It'll show the list all of your transactions for each vendor. 

To find these reports and search for others that may help, I recommend going from the Reports Centre directly. Go to the Reports menu in the top menu bar and then choose Report Centre. You're able to see more options by scrolling through the window or using keywords to search.

I hope this helps. Reach out if there's anything I can assist you with. Have a good day. 

Thank you, however this is not what I need. 

The vendor refunded our credit card, did not send a check for us to deposit. 

They overcharged us on a bill, so there is a credit on that bill showing on their account. 

They then took that amount and refunded it to the credit card that was charged. 

The credit is already on the vendor account. I can put the refund into the credit card account, but I need to attach the two, so they balance out. 

Thank you

Hi there, katrina10.

I admire you for coming back to the thread to add further details about your concern. With this, I'll make sure you're able to record the vendor refund accurately.

Since your vendor refunded the difference of $1,146.65 to a credit card, you can record this as Credit Card Charges in QuickBooks Desktop. This way, you can attach the two transactions as you use the same accounts where the credit card is being charged.

Here's how:

1. Go to the Banking menu at the top.
2. Choose Enter Credit Card Charges.
3. From the Credit Card drop-down, select the credit card account.
4. Choose the Refund/Credit radio button.
5. Choose the relevant Vendor name. Then, enter the Date, Ref No, and Amount.
6. Enter an appropriate memo to describe the transaction.
7. If you returned Items, select the Item tab and enter the Items and Amounts from the refund.
8. If the refund does not have Items, choose the Expenses tab.
9. Choose the appropriate Accounts and enter the Amount.
10. Hit Save & Close.

To see additional information about recording refunds you received from a vendor, you can click this article: Record a vendor refund in QuickBooks Desktop.

Please refer to this article to see different vendor reports that tell you where your company stands, in terms of expenses and accounts payable: Customize vendor reports.

Please know that I'll just be around here in the Community if you needed any help. Have a good one and take care always!

Hello, I have followed the steps above but when I'm on the Pay Bills screen and select the Bank Deposit I just created, the Vendor Credit shows up in the Credit Applied field and the Total payment shows up as $0.00, but I'm not able to Save and close the transaction. There's an error message at the top of the screen "Something's not quite right. You can't apply more credits than there are bills due." What am I doing wrong?

Hi there, kevinmaz.

Thank you for visiting again the QuickBooks Community and I also appreciate you for following the steps shared above to achieve your goal. I'll be sharing troubleshooting information to ensure you're able to successfully apply the credit to the vendor when paying the bill without any error message. 

You're doing on the right track when applying the amount of credit to pay a vendor. A cache full of history and temp files can cause unexpected behaviors, such as being unable to save and close the transaction and getting a specific error message. I recommend logging in to your QuickBooks account using a private browser. This is to rule out the possibility of a webpage issue, and private browsing doesn't store local files or cache.

Use these keyboard shortcuts based on the browser you're using:

• For Firefox or Microsoft Edge, press Ctrl + Shift + P.
• For Chrome, press Ctrl + Shift + N.
• For Safari, hold down Command + Shift + N.

If it works in incognito, I recommend clearing the cache of your regular browser. This removes the history or log of sites so you can start with a clean slate. You can check this article to see the steps: Clear cache and cookies to fix issues when using QuickBooks Online.

If the steps above didn't work, use another supported browser as alternatives.

Lastly, you may open this article to view details on how to run a particular report that will reflect all payments made to vendors: Run a report with vendor totals.

Let me know if there's anything else you need with vendor entries. I'm always here to help you anytime. Take care and keep safe!

Thank you ChristieAnn for your timely reply and suggestions! Unfortunately each of those recommendations resulted in the same result I wrote about yesterday: There's an error message at the top of the screen "Something's not quite right. You can't apply more credits than there are bills due."

I'm following the suggestions that were higher in this question's thread, but I'm not exactly sure why I'm accounting for this through the Accounts Payable account? Besides this last step from the "Pay Bills" screen that's not working, both the Vendor credit and check deposit seems to be accounted for properly in the respective QuickBooks Accounts. What am I missing here?

Let's make sure to fix the error that you're getting, kevinmaz.

Ideally, you'll get this error once you have selected numerous deposits and vendor credits. You can try entering the amounts to be paid as 1. Once done, edit the bill payment from 1 to 0. To do this, follow the steps below:

1. Go to the Expenses menu on the left. 
2. Under the Expenses tab, select the bill payment to edit. 
3. Under the Bill Payment page, change the amount to zero. 
4. Click Save and close.

In connection, ensure to select a bank deposit and vendor credit. Also, as mentioned by Mark_R,  you'll have to account for Accounts Payable so you can tie the refund to the vendor credit. However, if the issue persists, I suggest reaching out to our support team so they can take a look at this. They have the tools to pull up your account securely. Here's how to reach them: 

1. Click the (?) Help icon and enter Talk to a human (then type it again when prompted).
2. When asked by the bot, enter your concern.
3. Select I still need a human, then proceed with Contact us or Get help from a human.
4. Choose either Chat or Callback.

In addition, QuickBooks downloads the latest transactions and tries to match with what you've entered in QuickBooks. To know more about this, check this article for your reference: Categorize And Match Online Bank Transactions In QuickBooks Online.

Please let us know if you need further assistance about entering deposits and vendor credits. We're always right here to help.

I have been trying to follow these steps.  I created a vendor credit (it is showing on the vendor transaction list).  When the check was received, it was deposited, and accounted to Accounts Payable.  Now I am trying to offset the two, and when I select Pay Bills, only the deposit appears (the vendor credit does not). 

Welcome to the QuickBooks Community, @dLearned. Let me help you with your query.

In order for us to see the Deposit and Vendor’s credit section, there are things we need to check. We need to turn off the Automatically Apply Credits.

Here’s how:

1. Go to Gear icon and then Your Company, select Account and settings.
2. Navigate to advanced.
3. Go to Automation section.
4. Turn off automatically apply credits.

  
For us to see the Deposit and Vendor’s credit section, here’s what need to do:

1. Go to Expense and then select the Vendor.
2. Click the vendor name to open the vendor transaction.
3. Once you’ve entered the vendor transaction, on the right side of the screen you will see the Add to Expense.
4. Below Add to Expense, click add all. You will now see your Deposit and Vendor’s credit separately.
5. Click Save or Save and close.
   
    

If you want to learn more about how to add credits, you can refer to this article.

Drop a comment below if you have other questions. I’m always here to help. Have a nice day!

Thanks, I resolved the issue by following instructions in a different thread (the instructions in this thread (and the linked article) are incorrect).  The CORRECT step is NOT "Pay Bills" but, on the Vendor screen, to click "+ Transaction" and select "Check".  This will pull up both the deposit and the vendor credit on the right of the screen to be selected.

 Selecting Pay Bills only shows the deposit, not the vendor credit.  The instructions (especially in a linked article) need to be amended.

I am running into an issue I hope you can help with.  The vendor has multiple open credit memos.  When I followed these steps for the pay bill portion, it divided the amount to all the credit memos, it did not just apply the entire deposit to the credit memo of the matching amount.  Is there any way to get it to apply to the correct credit memo? Thank you for your help.

Hi- I followed these steps and ran into an issue.  The vendor currently has a few open credits.  I received a check for 1 of the credit memos.  When I followed these steps, it divided the deposit between the open credit memos.  Is there a way to specify that the credit memo should go towards the credit memo that matches the deposit?  Thank you for your help.

Thanks for checking in with us, LunaSB.

I appreciate you for performing the steps provided by my colleague. How you enter the credit depends on how you record your purchases. If you enter bills to track your expenses, we can create a vendor credit and apply it to a bill. This makes sure the credit hits the expense account you use for this vendor. Here's how: 

1. Click the + New Plus icon. 
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 credit for.
5. Press Save and close.

Then, apply a vendor credit toward any open or future bill. When you’re ready to use the credit, here’s how to do it.

1. Click the + New Plus icon.
2. Select Pay bills or Pay bill.
3. Choose 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.
5. Press Save and close.

For other options, check out this article: Handle vendor credits and refunds in QuickBooks Online. If you are trying to process a refund from the vendor, follow the steps in this article: Enter a refund from a vendor.

In case you need help with another task in QuickBooks, please feel free to visit our general help topics page. This is where you can find related help articles, Community discussions, video tutorials, and more.

You can always update us after performing the steps, as I want to ensure this is resolved for you. Just leave a comment below and I'll get back to you. Have a great day ahead.