Linda Artisani shows two ways to apply a vendor credit smaller than your bill in QuickBooks Online. You can enable automatic credit application in Account Settings, or manually create a payment for just the credit amount ($500 instead of the full $1,020.79 bill) and pick a bank account to process it.
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Hi there, Linda Artisani, Artisani Bookkeeping. I wanted to do a video which is born out of a comment that I got on my YouTube channel on a video called Refund from a Vendor in QBO, and it was from Salo, and he actually wanted to know how to apply a vendor credit when the credit balance is less than the actual total bill. And he was running into a problem where the system wouldn't let him apply it because it was not seeing a bank account. So to recreate his scenario, I'm bringing you to my sample company, and I have a bill here for Acme Printing for $1,020.79. I ordered envelopes and flyers and all things like that. Somewhere down the road, I decided, you know what, I really don't want to have the printed envelopes. I'm going to go with the plain, save myself some money. So it saved me $500, and Acme Printing sent me a vendor credit for $500. So now I don't owe them $1,020 anymore, I owe them $520. But I want to apply this so it actually shows as all I owe is the $520. So how do I do that? Well, there's a couple of ways. One way you can have it automatically happen is you can go to your gear, go to account settings, go to advanced, and there's this automation section. And you can actually automatically apply credits. That would be vendor credits and customer credit memos. So know that when you turn this feature on, and you just come to the pencil to activate it, that will— and you put the little checkmark in there— that will actually make it so that you don't have to apply it. It'll happen by itself. So that's the simplest, quickest way, but it doesn't always work for every company. So how do I apply this vendor credit to this bill? Well, I can come over here and make a payment, and the problem he was running into— and this is what his problem was— I'm gonna take my bank account out. He didn't have a bank account in here, so he was seeing that it wanted an account, and he was trying to not pay this. He wanted to pay zero, so he needed to— let's put the bill back and let's put the credit back. He wanted to pay the $500 credit on the bill but not pay the full amount, so he would need to come in here and change this to $500. One of the issues he was having is if I try to save and close this, It's gonna come up that this is not right, you need a value in here. So I need to put my bank account in here. Once I do that, I should be able to save and close this. Now when I go back, it's showing that it's open $520 and it's overdue by $520, which is what he wants to see. He doesn't want to accidentally pay this $1,020 when he doesn't really owe it. So that's basically how you produce this type of transaction. It's fairly easy. If you want to automate it, again, you go to the gear wheel and go to the advanced. That will automate this. But I think that's an easy tip to find out how to apply a vendor credit that's not quite the same amount as the bill. You have to go in there, make sure there's a bank account there. Even though it's a zero transaction, you want to make the bank account. And then you also want to remove the— you want to change the amount paid To not pay the bill in full, make that the same amount as the credit. So that's the important piece that you change that credit amount, that bill payment amount to $500, which is what my credit was. And that'll zero out the credit, apply it to the bill, and then reduce your bill amount that you owe to the amount that's actually due. So I hope that's helpful. If you have any questions or comments, please reach out to me just like Salo did, and I can answer and maybe make a video so you can see visually what To do in this account. Thank you so much for watching. Bye now. Bye.
