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 offset account to reverse — any Chart of Accounts type (expense, asset, revenue, liability, or equity), or split across several accounts
• 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 coding

How it works

Saving a vendor credit posts an entry that debits Vendor Credit Balance and credits the chosen offset account(s). When you link the credit to an original bill, the offset account is taken from that bill's receipt journal entry (the expense or inventory account debited when the bill was received). If no bill is linked, or the bill has not been received yet, you can pick the offset account manually; otherwise it defaults to Uncategorized Expense. The offset can be any Chart of Accounts type, mirroring manual journal entries, so credits that don't map to an expense (e.g. a revenue rebate or a liability accrual) no longer need a separate adjusting entry. 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 draft, then click Issue to post the journal entry and make the credit available.
4. When paying a bill, apply the issued credit to lower the balance due, then pay the rest in cash.