I have made some deposits with vendors. These do not show up as credits. How do I apply them to later bills?

Hey there, @bdy-kmv.

How you enter the credit depends on how you record your purchases.  Because you'd like to enter credits for bills you plan to pay later, this will ensure the credit hits the expense account you use for this vendor. 

If you’re unsure, you can always ask your accountant. Here's what you'll do:

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. Select Save and close.

You can 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. Select + New.
2. Select 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'm including a helpful article for you to reference as well: Handle vendor credits and refunds in QuickBooks Online.

Let me know if you have other questions on this, or anything else. I'm here to help!

Thank you, but this doesn't quite match my situation.

I made some advance payments, and recorded them as "Vendor deposits," an asset, according to the instructions I got from QBO Help.

I never actually received a vendor credit.

Now I would like to apply these deposits to bills and it is not clear to me how to do that.

Thanks for getting back to us, @bdy-kmv.

Allow me to join in this conversation and add more insights into this process. 

Doing bank deposits will increase your account's balance. Since you're trying to make some advance payments, this should also reduce your bank's balance. That's why you can't use this transaction when creating vendor credits.

You can enter the advance payment as a check instead. Then, change its account type to A/P so you can link it to an open bill. Let me show you how:

1. Click +New and select Check.
2. Choose the name of the vendor in the Payee drop-down list.
3. In the Category section, select Accounts Payable, then enter the amount.
4. Fill in the rest of the information and click Save and close.

Once done, create a bill and apply the prepayment to it. Here's how:

1. Click +New and select Pay bills.
2. Choose the bank account in the Payment account drop-down list.
3. Look for the bill and check the box beside the vendor's name.
4. The credit will automatically show up as applied in the CREDIT APPLIED section. 
5. Click Save and close.

After this, you can delete the deposits you've made so it won't impact your bank's balance. I'd also suggest reaching out to your accountant for further advice to make sure everything is accurate.

In case you've got a credit on your future purchase, you can enter it as a vendor credit and apply it to a bill. 

If you need anything else, the Community is the place to go. Have a good one.