Vendor Credits

Record credit notes from vendors for returns, billing errors, or negotiated allowances. Apply credits against outstanding bills to reduce what you owe.

Creating a Credit Note

A vendor credit note records money that a vendor owes you. This typically happens when:

• You returned goods to the vendor
• The vendor overcharged you on a bill
• You received a billing adjustment or allowance
• Goods arrived damaged and the vendor issued a credit
• A service was not delivered as agreed

To create a vendor credit:

1. Navigate to Vendors from the sidebar
2. Select the vendor who issued the credit
3. Click New Credit Note (or navigate to Vendor Credits and click Create Credit)
4. Enter the Credit Date -- typically the date the vendor issued the credit
5. Enter a Reference Number if the vendor provided one (e.g., their credit memo number)
6. Add line items describing what the credit is for:
   • Description: What was returned or adjusted
   • Account: The expense or asset account to credit (this reverses the original charge)
   • Amount: The credit amount for this line
7. Add any relevant notes for your records
8. Click Save Credit

Journal Entry Created

When you save a vendor credit, BizBooks Pro automatically creates a journal entry:

This reduces your accounts payable balance for the vendor and reverses the expense or asset charge from the original bill.

Applying Credits to Bills

After creating a vendor credit, you can apply it against outstanding bills from the same vendor to reduce the amount you need to pay.

1. Open the vendor credit you want to apply
2. Click Apply to Bill
3. Select the outstanding bill (or bills) from the list
4. Enter the amount to apply against each bill
   • You can apply the full credit to one bill
   • Or split the credit across multiple bills
   • Or apply a partial amount and keep the rest as an open credit
5. Click Apply

When a credit is applied to a bill:

• The bill's balance due is reduced by the applied amount
• If the credit fully covers the bill, the bill status changes to Paid
• If the credit partially covers the bill, the remaining balance stays outstanding
• The credit's available balance decreases by the applied amount

Example

You have a $500 credit from a vendor and two outstanding bills:

Viewing Open Credits

To see all vendor credits that have not been fully applied:

1. Navigate to Vendor Credits from the sidebar (or from within the Vendors section)
2. The list shows all credit notes with their current status
3. Filter by Status to show only open credits
4. Filter by Vendor to see credits from a specific vendor

For each credit, the list displays:

• Credit number and date
• Vendor name
• Original amount: The total credit value when created
• Applied amount: How much has been applied to bills so far
• Available balance: The remaining unapplied amount
• Status: Open or Applied (see below)

Credit Status

Vendor credits have two possible statuses:

A credit starts as Open when created and transitions to Applied once the full amount has been used against bills.

Deleting Credits

You can delete a vendor credit only if it has not been applied to any bills.

1. Open the vendor credit from the list
2. Click Delete Credit
3. Confirm the deletion

Deleting a credit reverses the journal entry that was created when the credit was saved, restoring the original accounts payable and expense balances.

Credits That Have Been Applied

If a credit has already been applied to one or more bills, it cannot be deleted directly. To remove it, you must first:

1. Unapply the credit from all bills it was applied to
2. Once the credit is fully unapplied (status returns to Open), you can delete it

This safeguard prevents accidental deletion of credits that have already affected bill balances and payment records.