A vendor credit records a refund for a returned product or service. Instead of creating a check or giving the actual cash, you’ll want to apply it directly to the current vendor balance. Let’s ensure to select the correct account in creating the vendor credit so it will be applied accurately to the Accounts Payable.
To pay your bills using your vendor credit, here’s how:
Create the Vendor Credit.
Click the Plus sign (+) icon.
Choose Vendor Credit.
In the Choose a vendor field, select the appropriate vendor.
Enter the Date, Amount, and Account.
Click Save and Close.
Pay the bill using the credit.
Go to the Plus Icon (+).
Choose Check or Expense.
Select the vendor.
Leave the Reference / Check #, Date, Amount and Memo fields blank.
Under Add to Check, add the Bill and Vendor Credit.