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Vendor credits

Open Vendor Credits

Overview

A vendor credit records an amount a vendor owes back to the business — for returned goods, a billing error, a price adjustment, or an overpayment. It is the purchase-side mirror of a credit memo: where a credit memo reduces what a customer owes you, a vendor credit reduces what you owe a vendor.

When posted, a vendor credit creates a journal entry (typically a debit to Accounts Payable and a credit reversing the original expense or input-tax credit). The credit is then applied to an open bill, reducing the amount you have to pay. The list tracks each credit’s applied amount and remaining balance.

Vendor Credits list showing credit number, date, vendor, reference, reason, total, balance, and status columns
The Vendor Credits list, tracking posted credits and their remaining balances.
  1. (1) Summary cards — Total Credits, Applied, Remaining Balance
  2. (2) Create Vendor Credit button
  3. (3) Status badge — Draft, Posted, Partially/Fully Applied, Void
  4. (4) Balance column — credit still available to apply
  5. (5) Actions menu — post, apply to bill, void

Screen Layout

Summary cards (top): Total Credits (amount + count), Applied, and Remaining Balance.

Toolbar: Create Vendor Credit button, search, and a Status filter.

Credit table (centre): Columns: Credit #, Date, Vendor, Vendor Ref, Reason, Total, Balance, Status, and Actions.

Statuses

StatusColourMeaning
DraftGreyCreated but not posted; no ledger impact
PostedBlueJournal entry created; available to apply
Partially AppliedAmberSome applied to bills; a balance remains
Fully AppliedGreenThe entire credit has been applied
VoidRedReversed; the entry is backed out

UI Elements

Editor Fields

Vendor

Required. Pick an existing vendor or quick-add a new one.

Reason

Why the credit was issued: Return, Damaged Goods, Billing Error, Price Adjustment, Overpayment, or Other. An optional Reason Note adds detail.

Line Items

Each line: Description, Qty, Rate, an optional expense Account, and an ITC checkbox for taxable lines.

Post immediately

Posts the journal entry on save instead of leaving the credit as a draft.

Table Columns

Balance

The remaining credit available to apply to bills.

Actions

Per-row: View Details, Post Vendor Credit (draft), Apply to Bill (when a balance remains), and Void Vendor Credit (only while nothing is applied).

Actions

Create a Vendor Credit

  1. Click Create Vendor Credit.
  2. Select the Vendor and enter the Date.
  3. Optionally enter the vendor’s Reference number and choose a Reason.
  4. Add line items: Description, Qty, Rate, and an expense Account. Tick ITC on taxable lines.
  5. Add a Memo if needed.
  6. Tick Post immediately to post now, or leave it to save a draft.

Post a Draft

Click ⋯ → Post Vendor Credit to create the journal entry. Posting cannot be undone — void instead if you need to reverse it.

Apply to a Bill

  1. Click ⋯ → Apply to Bill on a posted credit.
  2. Select the Bill (the list is filtered to the vendor’s unpaid bills) and enter the Amount to Apply (up to the remaining balance).
  3. Confirm. The bill’s payable balance is reduced and the credit’s status moves to Partially Applied or Fully Applied.

Void a Vendor Credit

A vendor credit can be voided only while nothing has been applied. Voiding reverses the posted journal entry.