Thanks for getting back to us, @LeahC.

I appreciate you trying the solution provided by my colleague. Allow me to join the conversation and add steps for recording the transaction.

If the vendor’s profile shows a negative balance, create a bank deposit and link the credit to offset the amount. Here’s how:

1. Go to Banking menu at the top and select Make Deposits.
2. If the Payments to Deposit window appears, click OK.
3. Select the vendor on the Received from field.
4. Choose Accounts Payable for the From Account.
5. Enter the amount of credit in the Amount column.
6. Click Save & Close.

Right after, you can link the deposit to the credit. Follow the steps below:

1. Go to Vendors menu at the top and select Pay Bills.
2. Put a checkmark on the Deposit that matches the credit amount.
3. Click Set Credits and apply the Credit, then choose Done.
4. Hit Pay Selected Bills.
5. Choose Done.

These steps should record the transaction correctly. For more information, check out this article: Record a vendor refund in QuickBooks Desktop.

Hit the Reply button below should you need further assistance working with QuickBooks. I’m more than happy to help. Have a great day!