How to apply a vendor credit to a Project/customer. I use projects in QBO and currently there doesn't seem to be a way to record any vendor returns to a project.

You can create a vendor credit and add it under a certain project/customer, @heatingguys.

Doing so gives you the option to apply it to an open or future bill. Here's how to record it in QBO:

1. Click the + New button and choose Vendor credit.
2. Pick a vendor from the drop-down.
3. Depending on how the purchase is recorded, enter the Category details or Item details. Use the same category, product, or service you're getting credit for.
4. In the Customer/Project column, pick the right one from the drop-down.
5. Hit Save and close.

Once done, you'll find it under the Transactions tab of the customer/project selected on the vendor credit. Please see screenshot for visual reference:

When you're ready, you can apply it to a bill. Follow these steps:

1. From the project's Transaction tab, open the bill.
2. Click the Make payment button below the Balance Due amount.
3. In the Outstanding Transactions section, mark the bill.
4. Go to the Credits section and place a checkmark in the box next to the Vendor Credit.
5. Hit Save and close.

For more information about the process, take a look at this article: Enter a credit from a vendor. 

I want to know if you need anything else by leaving a comment. It's always a pleasure to help. Take care!
 

That would work fine if I had bills. But I'm COD most everywhere, so things go in as an expense because I pay up front, instead of receiving a bill and putting it in the A/P account, and when I return something it comes right back to my bank account or cash account. 

I believe the way that you proposed would only work if I received bills from my vendor and therefore could actually apply the credit to a bill but since I don't have bills there would be no way to clear out the vendor credit.

For most my returns I add them straight from my banking tab and it doesn't let me assign a customer or project.

Unless I am doing that improperly and not using the system the way I should?

Thanks for following up here, heatingguys.

In addition to what my colleague KhimG recommended, there's another option to consider to apply a vendor credit to a project or customer without a bill. I'm listing the details below.

This can be done using steps similar to those listed above, but by creating a Check, rather than a Vendor Credit. With a check, paying money to a payee will be shown, and the money will instantly leave your account (instead of showing as a credit on the vendor's profile).

1. Click the + New button and choose Check.

2. Select a vendor from the drop-down menu.

3. Enter the Category.

4. Choose the correct Customer/Project.

5. Click Save and close.

Let me know how this works for you. I'm only a comment away if you have any other questions.

I am wondering if this worked for anyone.... Maybe I entered something incorrectly. Doing it by the last step is causing it to be an expense not a credit. 

Which step are you referring to, @RachelL?

Normally, if you are using bills for vendor expenses or projects, KhimG's answer is the best resort to record a credit. You may follow the steps outlined from her previous post.

Also, this article list all the process for you: Enter a refund from a vendor.

If you're pertaining to MorganB's recommendation to write a check, this process will only work if you want to record a refund towards a customer. Checks are expense transactions which reduces the bank balance.

On the other hand, a credit from a supplier means a return of funds. Therefore, we need a vendor credit to put back the money in the register and offset the Accounts Payable balance.

Let me know how things go or if you need further help with this topic. I'll be right here to help you anytime. Have a good week ahead!

I was referring to the step MorganB. posted. Sometimes we get cash refunds. We don't have bills to apply those to. I simply deduct it from the original purchase. There are times we have to use cash for purchases so the cash doesn't always go back into the account. I hope this makes sense. I am simply trying to add the credit to the project the original purchase was for showing the actual amount that was spent. 

Thank you for posting here in the Community, @RachelL.

you can create a vendor credit, then make a bank deposit. Once done use pay bills to link the deposit and the vendor credit.

Here's how to link deposit to vendors credit:

Even if you're not paying a bill, this is the right thing to do to keep your vendor expenses accurate.

1. on the left navigation pane, click on + New then select Pay Bills.
2. Choose the bank deposit you just created. You’ll see the amount of the vendor credit in the Credit Applied field. The Total payment should be $0.00.
3. Once done, click Save and close.

You can also check this article for additional information about vendor credit: Enter a refund from a vendor.

Comment down on this thread if you have additional questions. Have a great day, and stay safe.

I'm frustrated because this only works if i have a bill.  I used my debit card at home depot and returned things for credit on my debit card.  My purchase was in previous month that has already been reconciled...i am not finding a way to correctly credit my project and my bank.  Please help!!

Thanks for joining us here, .copperwiel.

You'll want to make a bank deposit for the credit that you received and post it on the bank where your debit card is connected. Here's how:

1. Click the + New button and select Bank Deposit.
2. Enter all the necessary and required details of the deposit.
3. Click Save and close. 

I'd also recommend reaching out to your accountant for further advice if you want to post the credit to the previous month since it's already reconciled. 

Don't hesitate to reach out to us again if you need anything else. 

Thank you...appreciate the response but that only gets money back into my bank but does not credit my project.

Hey,

Not sure if this will get you the results you're looking for but.... You could try a journal entry. Debit accounts receivable (you'll have to create a customer account for your vendor ie HomeDepot) and credit whatever the expense category was, enter the project/customer in the customer field. Then make a deposit for the amount from accounts receivable with the home depot (customer) account. It seems like a dumb work around to me but it will get that expense credit to show up in your project.

I ended up here b/c I was trying to create a credit for a project's invoice based on an estimate. I was trying to credit a project invoice and have it linked to the estimate from which the invoice was linked.

I face the same problem - the solutions QB has lined out DO NOT WORK - unless I am missing something if you have posted an EXPENSE (not a bill), then I can't use their steps successfully. The only way I have found to get the credit back into the Project section for the way I am recording things is to make the deposit come back to the customer/project. So I put the customer/project name in the received from area, and then in the memo - I say it was for a refund from Home Depot or whatever it was. But in my use of QB Projects -  I do not bill the customer, it is only for record keeping of income/expense for the specific project. Not sure if it will work for you.

https://www.youtube.com/watch?v=S3PFsn5MrAM

I found this video and this worked for me!