Vendor Credits

A vendor credit captures money a vendor owes you back: a return, an overpayment, or a negotiated rebate. Instead of chasing a refund, you apply the credit to future bills and pay less cash.

Key capabilities

• Record credits with vendor, date, amount, and the expense/inventory account to reverse
• Track remaining (unapplied) credit balance per vendor
• Apply one credit across one or more open bills
• Reduces the net cash due when paying bills (credit first, cash for the remainder)
• Posts a balanced journal entry that reverses the original expense or asset

How it works

Saving a vendor credit posts an entry that debits accounts payable (or credits the expense/asset). When you apply it to a bill, the bill's balance due drops by the applied amount, so the eventual payment only covers the remaining cash.

How to use it

1. Open Vendor Credits and choose New.
2. Select the vendor, date, amount, and the account being credited.
3. Save — the credit shows an available balance for that vendor.
4. When paying a bill, apply the credit to lower the balance due, then pay the rest in cash.