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The transaction to record the vendor credit in QuickBooks is required when you return items to the vendor. For this type of transaction, you have to enter a vendor credit to record your returns or refunds to the vendor. In case of a return, if the vendor sent you the credit document then it clearly says that you no longer owe any amount to the vendor. If the vendor is not able to send a credit document then they send you or issue a refund check for that refunded item. Learn How to Record a Vendor Credit in QuickBooks Online.
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In both cases, whether the vendor issues you a refund check or a credit document you have to enter a vendor credit into your QuickBooks account. After that, when you pay the vendor’s bill then you have to apply to your books.
In case of a refund cheque, you also have to enter one more thing into your book that is to enter a deposit and then link it to the refund check that you have entered before.
Table of Contents
What are the Steps to Record a Vendor Credit in QuickBooks Online?
Steps to enter the vendor credit are as follows:
- In QuickBooks Online, click on the Create that is shown in the form of + sign.
- From the drop-down option of create button, click on the Vendor Credit.
- The window of Vendor Credit opens up.
- Choose the Vendor who issues you the credit.
- Mention the Date for the credit given by the vendor.
- Enter the Amount in the credit amount field.
- Go to the Account Details section.
- Now click on the amount that is used on the original bill.
- In case you received the credit; when you return the items to the vendor.
- Then choose the items in the Item Details section that you returned.
- Now you have to scroll down and then attach an electronic copy of your credit to the transaction of vendor credit.
- Click on the button Save and Close if you don’t want to add any other thing to the list. Click on Save and New button if you want to add anything else to the list.
What are the steps to Enter the Deposit for the Refund Check?
You have to process these steps when the vendor sends you the refund check. So to enter this refunded check into a deposit and link it to vendor credit; follow the steps below:
- Click on the Create icon that is + sign.
- Now from the create menu options at shown to you.
- Select the Bank Deposits option.
- The deposit transaction window opens up on your screen.
- Now go to the Deposits Section then provide the information that is required.
- Choose the Vendor who issued the cheque into the received column.
- Then select the Accounts Payable account in the Account column.
- Now mention the Amount of the check the amount column.
- Click on Save and Close button to save this transaction and then close the window.
- Again, click on the Create button that is + sign.
- Choose option Expenses from the drop-down menu of create button.
- The expense window opens up.
- Select the Vendor from whom you get the refund cheque that you are depositing.
- In outstanding Vendor Credit, click on the Add button.
- Then click the Add option in the deposit.
- After adding the transaction, the QuickBooks account that creates the bill payment transaction with the net value of zero that also applies dedicated to the deposit.
- Then click on the Save and Close option if you don’t want to add any other transactions.
- But if you want to add any other transactions then you have to click on Save and New button.
In this article, you get to know the procedure to record vendor credit in QuickBooks Online using the above procedure. The process is explained in detail so that you can easily process it without any problem. In case you have any issues then the Dancing Numbers expert team is available via LIVE CHAT.
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Frequently Asked Questions (Faqs)
How to Link Deposits to the Bill Credits by the Vendor after Recording the Vendor Credits in QuickBooks Online?
• In QuickBooks Online, go to the Vendor’s menu.
• Click on the Pay Bills.
• Then select the deposits that you made and they match the vendor check amount.
• Click on the Set Credits.
• After that, apply the Bill Credit that you have created before.
• Hit on the Done button.
• Click on Pay Selected Bills.
• Then click the Done button when you are done linking it.
What do you mean by a Journal entry for a Vendor Credit to Record a Vendor Credit in QuickBooks?
The journal entry is done debit to your supplier’s account that decreases your liability. After that, you have to credit the purchase return account which also decreases your expenses.
What do you mean by Vendor Credit in the Record of a Vendor Credit in QuickBooks Online?
The vendor credit is a financial transaction that reduces the amount owed to the vendor for your future bill. In other words, when you do a return or refund the item; you receive a credit document or credit note for that amount and you are not liable to pay it and get the amount refunded.
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