In the event that an outside vendor issues your firm a credit for future invoices, that credit can be applied to our Vendor Bills
module as a Vendor Credit Memo.
To record a Vendor Credit Memo, go to Vendor Bills
and click on the plus sign on the green tool bar.
Select New Vendor Credit
Fill in the required fields including the Vendor, the account from the chart of accounts, amount, reference number, and amount, then hit Create.
Creating the Vendor Credit will automatically create an entry on the General Ledger debiting the "Vendor Bill Credit" account, and crediting the selected account. These entries will show on an accrual basis only, not on cash.
When you receive your next bill from the vendor, you can then apply the credit to that balance by clicking on the plus sign again and selecting "Pay Vendor Bill."
In the Payment Module, you will be asked to choose the vendor, which will then display your available credit as well as any open invoices.
Fill in the amount you want applied to the invoice if you only want to use part of the credit. If there is a remaining balance, it would then be paid as usual with an operating account or a credit card.