This article provides steps in handling supplier credits and refunds. If you're not sure when to use Pay Bills and Write Cheques, see What is the difference between Pay Bills and Write Checks/Cheques?

Scenario 1: Link a supplier refund cheque to a supplier credit

If the refund is for returned inventory items, you need to create a supplier credit.

Step 1: Enter the supplier refund cheque in the Deposits screen

  1. Select the Plus Icon (+) at the top then Bank Deposit.
  2. In the Add other funds to this deposit section, fill in the following fields:
    • Received from: Select or enter the supplier name.
    • Account: Select the Accounts Payable account.
    • Amount: Enter the cheque amount.
  3. Select Save and close.

Step 2: Link the deposit to the supplier credit

  1. Select the Plus Icon (+) at the top then Cheque.
  2. In the Choose a payee drop-down, select the supplier name.
  3. Leave the Cheque #, Date, Amount and Memo fields blank.
  4. From the Add to Cheque section, select Add for the outstanding supplier credit and deposit.
  5. Select Save and close.

Scenario 2: Pay bills using supplier credits

Step 1: Enter the supplier credits

  1. Select the Plus Icon (+) at the top then Supplier Credit.
  2. In the Choose a supplier field, select the appropriate supplier name.
  3. Enter the Date, Amount, and Account (the account used here is typically the original expense account on the original bill.)
  4. Select Save and close.

Step 2: Pay the bill using the supplier credits

  1. Select the Plus Icon (+) at the top then Cheque.
  2. In the Choose a payee drop-down, select the supplier name.
  3. Leave the Cheque #, Date, Amount and Memo fields blank.
  4. From the Add to Cheque section, select Add for the outstanding bill and supplier credit.
  5. Select Save and close.

Why do I have supplier credits?

If you recorded cheques for Suppliers in the Cheques screen and didn't enter bills, you may end up with negative balances for your Suppliers.

To fix this, either go back and delete the bill payments and replace them with Cheque, or simply enter one or multiple bills to link the bill payments to.

To link the Supplier credits with bills, first create the bills. When you're ready to link the bills to Supplier credits:

  1. Select the Plus Icon (+) at the top then Cheque.
  2. In the Choose a payee drop-down, select the supplier name.
  3. Leave the amount field blank.
  4. From the Add to Cheque section, select Add for the outstanding bill and supplier credit.
  5. Select Save and close.
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