How to Apply Vendor Credit in QuickBooks Online
7/8/2025
Managing your business finances requires attention to detail. One important aspect is working with vendor credits in QuickBooks Online. These credits help you track refunds or credits you receive from vendors. Keeping your accounts payable accurate is crucial for maintaining correct financial records.
Understanding Vendor Credits
A vendor credit is an allowance a vendor extends to you. It usually happens when you return goods, get a refund, or when a service or product you ordered was defective or not delivered. This credit can be used against future purchases or directly refunded. Managing these credits properly helps keep your accounts balanced.
This guide will show you how to apply a vendor credit step by step.
Steps to Apply a Vendor Credit in QuickBooks Online
Follow these steps to apply vendor credit:
- Create a Vendor Credit
- Start by clicking the + New button.
- From the menu, select Vendor Credit.
- In the Vendor dropdown, choose the vendor that issued the credit.
- Enter the necessary details:
- Date: Enter the date when the credit was issued.
- Category Details or Item Details: Fill in either the category, product, or service related to the vendor credit. The choice depends on how you record your purchases.
- Amount: Input the total credit amount.
- Click Save and close to save the vendor credit.
- Apply the Vendor Credit to an Existing Bill
- Go back to the + New button and select Pay Bills.
- From the displayed list, select the bill related to the vendor.
- In the Credit Applied field, QuickBooks will show any available credit for that vendor.
- Make sure the credit applies to the correct bill, which will reduce how much you owe.
- Complete any other necessary fields.
- Finally, click Save and close to finish the transaction.
Additional Considerations
Here are two important things to keep in mind:
- Recording a Vendor Refund: If a vendor sends you a refund check, first enter a vendor credit. After that, record a bank deposit and link this deposit to the refund check.
- Applying Vendor Credit to Future Bills: If you want to keep the vendor credit for later, you can apply it to a future bill for that vendor when it comes time to pay.
By following these steps, you can manage vendor credits with ease in QuickBooks Online. Keeping your records accurate not only helps with your finances but also gives you a clear picture of your business operations.
Understanding how vendor credits work is key to financial management. It prevents confusion and helps maintain trust between you and your vendors. Taking time to learn and apply these credits will ultimately benefit your business.