What Are 2 Ways to Use a Vendor Credit in QuickBooks Online?
Managing vendor credits is an essential aspect of maintaining accurate financial records in QuickBooks Online. Vendor credits are created when a vendor owes you money or when you return items to a vendor. These credits can be used in two different ways to offset future expenses or to receive a refund. In this article, we will explore the two ways to use a vendor credit in QuickBooks Online and answer some common questions about this feature.
1. Applying vendor credits to future expenses:
One way to use a vendor credit in QuickBooks Online is by applying it to future expenses. This is particularly useful when you have an outstanding balance with a vendor and want to offset it with the credit. Here’s how you can do it:
Step 1: Create a new expense transaction.
Step 2: Select the vendor you want to apply the credit to.
Step 3: Fill in the necessary details such as the expense amount and account.
Step 4: In the Payment section, click on “Apply credits.”
Step 5: Choose the vendor credit you want to apply from the list.
Step 6: Review the remaining balance and click “Save and close” to complete the transaction.
By following these steps, you can apply the vendor credit to the expenses you owe the vendor, reducing the amount you need to pay.
2. Requesting a refund using a vendor credit:
Another way to use a vendor credit in QuickBooks Online is by requesting a refund from the vendor. This is applicable when you have returned items to the vendor or have an available credit balance. To request a refund using a vendor credit, follow these steps:
Step 1: Create a vendor refund.
Step 2: Select the vendor you want to request a refund from.
Step 3: Specify the refund amount and choose the account to track the refund.
Step 4: In the “Payment method” dropdown, select “Vendor credit.”
Step 5: Choose the vendor credit you want to use for the refund.
Step 6: Review the details and click “Save and close” to complete the process.
By requesting a refund using a vendor credit, you can effectively utilize the credit amount and receive the refund you are entitled to.
Common Questions and Answers:
1. How do I know if I have any vendor credits in QuickBooks Online?
To check for vendor credits, go to the “Expenses” tab and select “Vendors.” Click on “Filter” and choose “Vendor credits” under “Type.”
2. Can I apply a vendor credit to multiple expenses?
Yes, you can apply a vendor credit to multiple expenses by selecting them one by one during the transaction creation process.
3. Can I use a vendor credit for a different vendor?
No, vendor credits can only be applied to the vendor they were originally created for.
4. What happens if the vendor credit amount is greater than the expense?
If the vendor credit amount is greater than the expense, the remaining credit balance will be available for future use or refund.
5. How can I track my vendor credits in QuickBooks Online?
Vendor credits can be tracked in the “Expenses” tab, under the “Vendors” section. You can also generate reports to get a detailed overview of your vendor credits.
6. Can I apply a vendor credit to an open bill?
Yes, you can apply a vendor credit to an open bill by selecting the bill and clicking on “Apply credits.”
7. Can I delete a vendor credit in QuickBooks Online?
Yes, you can delete a vendor credit if it hasn’t been used in any transactions. Go to the “Expenses” tab, select “Vendors,” and find the vendor credit you want to delete. Click on the drop-down arrow and choose “Delete.”
8. Can I convert a vendor credit into a customer credit?
No, vendor credits and customer credits are separate entities in QuickBooks Online and cannot be converted into one another.
9. Can I apply a vendor credit to a sales transaction?
No, vendor credits can only be applied to expenses or refunds related to the vendor.
10. How can I see the history of a vendor credit in QuickBooks Online?
To view the history of a vendor credit, go to the “Expenses” tab, select “Vendors,” and find the vendor credit. Click on the drop-down arrow and choose “Transaction History.”
11. Can I apply a vendor credit to a bill that has already been paid?
Yes, you can apply a vendor credit to a bill that has already been paid by selecting the bill and clicking on “Apply credits.” The credit amount will be applied as a payment towards the bill.
In conclusion, using vendor credits in QuickBooks Online can help you efficiently manage your financial transactions with vendors. By applying vendor credits to future expenses or requesting refunds, you can ensure accurate record-keeping and maintain good relationships with your vendors.