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