How to Use Vendor Credit in QuickBooks Online
Vendor credits are a useful feature in QuickBooks Online that allows you to track and apply credits received from your vendors. These credits can be used to offset future purchases or applied towards outstanding bills. In this article, we will guide you through the process of using vendor credits in QuickBooks Online and answer some common questions about this feature.
Step 1: Record the Vendor Credit
To begin, go to the “+New” button in the top left corner of your QuickBooks Online dashboard and select “Vendor Credit” under the “Vendors” column. Fill in the necessary details such as the vendor name, the date of the credit, and the amount. You can also add a memo if needed. Click on “Save and close” to record the vendor credit.
Step 2: Apply the Vendor Credit
To apply the vendor credit to an outstanding bill, go to the vendor’s profile by clicking on the “Expenses” tab and selecting “Vendors.” Locate the vendor and choose “Make payment” from the “Action” column. In the “Credits” section, you will find the available vendor credit. Select the credit you want to apply and enter the amount to be applied. Click on “Save and close” to complete the process.
Step 3: Check the Vendor Credit Balance
To view the vendor credit balance, go to the vendor’s profile and click on the “Transactions” tab. Select “Vendor credits” to see a list of all vendor credits and the remaining balance for each vendor.
Now, let’s address some common questions about using vendor credits in QuickBooks Online:
1. Can I apply a vendor credit to multiple bills?
Yes, you can apply a vendor credit to multiple bills. When making a payment, simply select multiple bills and allocate the credit accordingly.
2. Can I apply a vendor credit to a future purchase?
Yes, you can apply a vendor credit to a future purchase. When recording the vendor credit, leave the “Amount” field empty. This will create an open credit that can be used later.
3. How do I know if a vendor credit has been applied?
To check if a vendor credit has been applied, go to the vendor’s profile and click on the “Transactions” tab. Select “Vendor credits” and look for the credit in the list. If it has been applied, you will see the amount applied in the “Amount used” column.
4. Can I split a vendor credit between multiple vendors?
No, you cannot split a vendor credit between multiple vendors. Vendor credits can only be applied to bills from the same vendor.
5. Can I convert a vendor credit into a refund?
Yes, you can convert a vendor credit into a refund. To do this, go to the vendor’s profile and click on the “Transactions” tab. Select “Vendor credits” and find the credit you want to convert. Click on “Make refund” and follow the prompts to complete the process.
6. What happens if I overpay a vendor and receive a credit?
If you overpay a vendor and receive a credit, you can apply that credit to future purchases or request a refund from the vendor.
7. Can I track vendor credits for tax purposes?
Yes, you can track vendor credits for tax purposes. QuickBooks Online allows you to generate reports that show vendor credits and their usage, which can be useful during tax preparation.
8. Can I apply a vendor credit to an invoice?
No, vendor credits cannot be applied directly to an invoice. They can only be applied to outstanding bills.
9. Can I delete a vendor credit?
Yes, you can delete a vendor credit if it has not been applied to any bills. To do this, go to the vendor’s profile, click on the “Transactions” tab, select “Vendor credits” and find the credit you want to delete. Click on the drop-down arrow in the “Action” column and choose “Delete” from the options.
10. Can I apply a vendor credit to a bill from a previous accounting period?
Yes, you can apply a vendor credit to a bill from a previous accounting period. QuickBooks Online allows you to apply vendor credits to any outstanding bills, regardless of the accounting period.
11. Can I apply a vendor credit to a bill that has already been paid?
No, you cannot apply a vendor credit to a bill that has already been paid. Vendor credits can only be applied to outstanding bills.
Using vendor credits in QuickBooks Online can help you effectively manage your vendor relationships and ensure that credits received are properly tracked and utilized. By following the steps outlined in this article, you can easily record and apply vendor credits, improving your bookkeeping accuracy and efficiency.