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Handling a credit from a vendor

From: QuickBooks Pro 2010 Essential Training

Video: Handling a credit from a vendor

Say one of your vendors sends you the wrong products or the right ones arrive but they are damaged. You call your vendor who issues you a credit. You have to record that credit in QuickBooks. Once you do, you can then apply that credit to a bill from that vendor to reduce what you have to pay. Recording a credit is almost identical to entering a bill. In fact, you use the Enter Bills window to do it. On the homepage click Enter Bills. QuickBooks automatically selects the Bill option, which sets up the window to enter a bill.

Handling a credit from a vendor

Say one of your vendors sends you the wrong products or the right ones arrive but they are damaged. You call your vendor who issues you a credit. You have to record that credit in QuickBooks. Once you do, you can then apply that credit to a bill from that vendor to reduce what you have to pay. Recording a credit is almost identical to entering a bill. In fact, you use the Enter Bills window to do it. On the homepage click Enter Bills. QuickBooks automatically selects the Bill option, which sets up the window to enter a bill.

Because you want to record a credit select the Credit option instead. The window heading changes to Credit and the Amount label changes to Credit Amount. In the Vendor dropdown list choose the vendor who issued you the credit. Choose the date that the vendor issued the credit in the Date box. If you want to record the vendor's ID for the credit, type it in the Ref Number box, then in the Credit Amount box, type the amount of the credit. Similar to when you enter a bill you fill in lines on the Expenses tab or the Items tab to identify what you're getting credit for.

In this case, choose the Office Supplies account on the Expenses tab. Even though you're getting a credit, which means you owe less money, you still fill in the amount of the credit with a positive number. QuickBooks takes care of tracking whether to add or subtract numbers. Fill in the Memo cell with info about the credit. If the expense was billable to a customer, you can choose the customer or job in the Customer:Job cell to remove the amount from what the customer owes.

When you're done, click Save and Close to close the dialog box. When you have credits available, they reduce the balance you owe in your accounts payable account. The vendor credit waits until you go to pay a bill from that vendor. To see the credit, open the Chart Of Accounts window and double-click Accounts Payable to open the register. You can see the credit to coffee service here. When you go to pay bills, QuickBooks shows the bills waiting to be paid, but there's no sign of the vendor credit just yet.

If you turn on the check box for a bill from the vendor who issued a credit, like Coffee Service shown here, QuickBooks shows the available credit in the Discount and Credit information section. QuickBooks automatically fills in the Amount To Pay cells with the full bill amount and the credits used is still zero. So, to apply the available credit to the bill, click Set Credits. In the Discount and Credit dialog box, the Credits tab opens and QuickBooks automatically selects the available credit.

The Credits Used value shows how much credit you applied and the Amount To Pay shows how much of the bill you still owe. You can edit the amount of the credit if you want to, but if it's set up the way you want, click Done to apply the credit to the bill. Back in the Pay Bills window, the Credits Used cell for the bill shows how much credit you applied and the Amount To Pay cell shows the remaining balance on the bill.

As you do for regular bills, choose the Payment Date, the Payment Method and the Payment Account before you click Pay Selected Bills. As you learned in the video Paying Bills, you can assign check numbers or tell QuickBooks to do that for you. Then when you're done, click Done to finish paying your bills. If you tend to forget about things like credits and discounts, you can tell QuickBooks to apply them to bills automatically. To do this on the Edit menu, choose Preferences, click Bills and then click Company Preferences.

Turn on the Automatically use discounts and credits check box. For discounts choose the account you want to use to track discounts from vendors, such as Vendor Discounts. Click OK to save your preferences. With this preference set, when you pay a bill for a vendor who has issued a credit or offers an early payment discount you qualify for, QuickBooks automatically applies the credit and discounts to the bill. If you don't want to use them you can click Set Credit or Set Discount to change the amount of credit or discount applied.

You can keep credits around for as long as you want, but it's a good idea to use them sooner than later, before the purchasing power of your money goes down or the vendor goes out of business.

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This video is part of

Image for QuickBooks Pro 2010 Essential Training
QuickBooks Pro 2010 Essential Training

69 video lessons · 22063 viewers

Bonnie Biafore
Author

 
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  1. 8m 19s
    1. Welcome
      52s
    2. Editions of QuickBooks
      3m 24s
    3. QuickBooks bookkeeping basics
      2m 46s
    4. Using the exercise files
      41s
    5. Disclaimer
      36s
  2. 9m 12s
    1. Opening a company file
      2m 4s
    2. Using the QuickBooks menus and home page
      2m 49s
    3. Touring the Customer, Vendor, and Employee Centers
      2m 32s
    4. Navigating between QuickBooks windows
      1m 47s
  3. 10m 50s
    1. Gathering the information you need
      2m 4s
    2. Creating a company file
      5m 33s
    3. Converting from another program
      3m 13s
  4. 8m 19s
    1. Naming and numbering accounts
      3m 36s
    2. Creating an account
      2m 26s
    3. Making an account inactive
      2m 17s
  5. 14m 50s
    1. Creating a customer profile
      3m 40s
    2. Adding customer information
      4m 33s
    3. Creating a job
      2m 18s
    4. Making customers inactive
      1m 39s
    5. Creating a vendor
      2m 40s
  6. 43m 35s
    1. Why use QuickBooks items?
      2m 59s
    2. Creating a service item
      4m 26s
    3. Setting up time tracking
      2m 53s
    4. Entering time
      4m 19s
    5. Tracking mileage
      4m 34s
    6. Creating an inventory item
      6m 7s
    7. Creating a non-inventory item
      3m 34s
    8. Setting up sales tax
      6m 59s
    9. Setting up discounts and charges
      3m 46s
    10. Creating a group of items
      2m 16s
    11. Making items inactive
      1m 42s
  7. 30m 46s
    1. Creating a purchase order
      3m 8s
    2. Entering a bill
      4m 37s
    3. Recording inventory you receive
      3m 47s
    4. Paying bills
      4m 5s
    5. Handling a credit from a vendor
      5m 2s
    6. Writing a check for expenses
      3m 17s
    7. Paying with a credit card
      1m 40s
    8. Paying with cash
      2m 53s
    9. Paying sales tax
      2m 17s
  8. 35m 5s
    1. Understanding invoices, statements, and sales receipts
      2m 23s
    2. Creating an invoice and filling in header fields
      2m 55s
    3. Adding items to an invoice
      5m 7s
    4. Adding billable time and cost to an invoice
      5m 57s
    5. Using subtotals, discounts, and other charges
      3m 6s
    6. Creating an estimate
      2m 49s
    7. Handling a customer credit
      4m 57s
    8. Creating a statement charge
      3m 7s
    9. Producing a statement
      4m 44s
  9. 14m 44s
    1. Setting up print options
      4m 13s
    2. Aligning forms with printer paper
      3m 0s
    3. Printing one or more forms
      4m 29s
    4. Emailing a sales form
      3m 2s
  10. 14m 8s
    1. Receiving a payment
      3m 49s
    2. Assessing finance charges
      4m 9s
    3. Creating a sales receipt for a cash sale
      2m 39s
    4. Depositing payments
      3m 31s
  11. 10m 37s
    1. Preparing to reconcile a bank account
      1m 50s
    2. Reconciling transactions to your bank statement
      3m 14s
    3. Correcting discrepancies
      5m 33s
  12. 9m 51s
    1. Using the Report Center to find reports
      3m 0s
    2. Running a report
      3m 45s
    3. Printing or saving a report
      3m 6s
  13. 6m 8s
    1. Why use journal entries?
      3m 3s
    2. Creating a general journal entry
      3m 5s
  14. 13m 39s
    1. Creating a new user
      4m 58s
    2. Backing up your company file
      6m 10s
    3. Restoring a company file
      2m 31s
  15. 27s
    1. Goodbye
      27s

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