Thank you for chiming in on this thread.

Let me guide you on how to zero out the vendor balance in QuickBooks Online (QBO). Once you have recorded the refund as a deposit, you can then link this to the vendor credit. Here's how:
 

1. In your QBO account, click on the +New icon, then select Expense or Check.
2. In the Choose a payee drop-down, select the vendor name.
3. Leave the Reference / Check #, Date, Amount, and Memo fields blank.
4. From the Add to Expense or Add to Check section, select Add for the outstanding vendor credit and deposit.
5. Select Save and close.

For detailed information, kindly visit: Enter vendor credits and refunds in QuickBooks Online.

Moreover, I'll also share this link where you can search for articles that can serve as your reference to guide you manage your suppliers: QuickBooks Online Help Articles for Expenses and Vendors.

Feel free to leave a reply if you require further assistance with managing vendor refunds in QBO. The Community team always has your back. Have a good one.