In any business, vendor credits are common. You might receive a credit when returning goods, overpaying a bill, or getting a price adjustment. In QuickBooks Desktop, it’s important to apply these credits correctly so your books stay accurate and your accounts payable reflects the right balance. This guide explains how to record a vendor credit in QuickBooks , how to apply it to an open bill, and what to do if you need to hold the credit for future use.
What Is a Vendor Credit?
A vendor credit represents money that your vendor owes you. Instead of issuing a refund, vendors often provide a credit you can apply toward future bills. For example, if you returned damaged items worth $500, your vendor might issue a $500 credit to apply to your next invoice. Recording and applying these credits properly is essential for tracking outstanding balances and ensuring your expense accounts stay correct.
When Should You Apply Vendor Credits?
You should apply a vendor credit when: a bill was overpaid and the vendor issued a credit instead of a refund, you returned items and the vendor gave a credit, the vendor offered a discount or price adjustment after the bill was created, or you’re entering a credit memo received from the vendor. QuickBooks Desktop gives you two main options for applying vendor credits. You can apply them directly while paying a bill, or use them when entering a new bill.
Step-by-Step: How to Enter a Vendor Credit in QuickBooks Desktop
Step 1: From the top menu, go to the Vendors tab and click Enter Bills.
Step 2: In the Enter Bills window, select the Credit option at the top instead of Bill. This tells QuickBooks you’re recording a credit, not a new charge.
Step 3: Choose the vendor who issued the credit.
Step 4: Fill in the relevant details, including the credit date, reference number (if provided), and account or item related to the return or adjustment.
Step 5: Enter the credit amount in the Amount field.
Step 6: Save and close the form.
How to Apply a Vendor Credit to a Bill
Once the credit is saved, it will sit in your vendor balance until applied. To apply it:
Step 1: Go to the Vendors tab and select Pay Bills.
Step 2: Find the bill you want to pay and select it.
Step 3: Look at the bottom of the window. QuickBooks will show available credits from that vendor. Click Set Credits.
Step 4: In the Available Credits window, check the box next to the credit you want to apply.
Step 5: Click Done. You’ll now see the credit deducted from the bill total.
Step 6: Complete the payment by choosing the payment method and clicking Pay Selected Bills.
How to Apply Vendor Credit Without a Matching Bill
If you have a credit but no bill to apply it to yet, you can still record it as described above. QuickBooks will hold the credit until a future bill is created. When you go to Pay Bills later, the credit will appear and you can apply it as needed. This is helpful when you expect future purchases from the same vendor but haven’t received the bill yet.
How to Review or Edit Vendor Credits
To check existing credits:
Step 1: Go to the Vendor Center.
Step 2: Select the vendor from the list.
Step 3: In the transaction list, look for any entries labeled “Bill Credit” or “Vendor Credit.”
Step 4: Double-click to open and edit the credit if needed. You can change the amount, account, items, or memo as long as it hasn’t been applied.
How to Delete or Void a Vendor Credit
If you created a vendor credit by mistake or no longer need it:
Step 1: Go to the Vendor Center and open the credit transaction.
Step 2: From the top menu, click Delete or Void.
Step 3: Confirm the action. Note that deleting a credit that was already applied to a bill will affect the bill’s balance, so review before deleting.
Best Practices for Handling Vendor Credits
Always match the vendor credit to the correct account or item category to keep your books clean. For returned inventory, use the item tab and choose the correct product. For expense reimbursements or discounts, use the expense tab and choose the right account. Don’t apply vendor credits to unrelated bills. Keep notes or memos in each credit transaction so your team can identify the reason for the credit later. Regularly review your vendor balances to spot unused credits and apply them before creating new payments.
When to Use SaasAnt Transactions for Vendor Credits
QuickBooks Desktop allows manual entry of vendor credits, but if you’re managing large volumes or working across multiple companies, manually entering each credit can be time-consuming. With SaasAnt Transactions, you can import vendor credits in bulk using Excel or CSV files. The tool allows you to pre-map fields like vendor name, credit amount, account, item, and memo. You can also apply logic to assign credits based on rules or conditions. This saves hours of data entry and ensures consistent formatting across all records.
Why SaasAnt Makes Vendor Credit Management Easier
SaasAnt is designed to help accountants and bookkeepers handle high-volume QuickBooks data tasks more efficiently. You can bulk import vendor credits, track changes, validate entries before upload, and undo incorrect transactions if needed. It’s especially useful if you’re migrating data, cleaning up backlog entries, or managing vendor activity for multiple clients. SaasAnt Transactions supports both QuickBooks Desktop and QuickBooks Online and offers smart filters, templates, and auto-mapping tools to make data handling faster and safer.
Try SaasAnt Transactions Today
If vendor credit management takes too much of your time, SaasAnt Transactions can simplify the process. Whether you’re entering credits, applying them to bills, or cleaning up your accounts payable, SaasAnt helps you get it done with fewer steps and fewer errors. Explore SaasAnt Transactions