Vendor Credits
A vendor credit records money a consultant, vendor or contractor owes back to your firm: a credit memo they sent after overcharging you, a refund for returned materials, a rebate, or an agreed fee reduction. It’s the bill-side twin of a credit memo.
A vendor credit is the payee’s document, not yours. You record the credit they gave you, with their credit number, and attach a copy of what they sent. It keeps a running balance of credit you can still use.
Before you start: Vendor credits show financial information, so you’ll only see them if your role allows it. See Roles and access.
Where vendor credits live
Section titled “Where vendor credits live”Vendor credits belong to a payee. Open the consultant, vendor or contractor and go to the Credits tab to see every credit from them, record a new one, and see their Available Credit: the total you can still use.
What a vendor credit contains
Section titled “What a vendor credit contains”- The payee it’s from, and optionally the project it relates to (leave it blank for a credit that isn’t tied to one project)
- The payee’s own credit number, a credit date, and a reason
- One or more line items, laid out just like bill lines, which add up to the total credit
- Optional notes
- The credit document the payee sent you: a PDF or a scanned or photographed image
Because the number is the payee’s own, two different payees can use the same number. The same payee can’t use it twice.
Reasons
Section titled “Reasons”| Reason | Meaning |
|---|---|
| Billing Error | The payee overcharged you and is correcting it. |
| Returned Item | You sent something back. |
| Fee Adjustment | A reduction you agreed with the payee. |
| Rebate | A rebate or volume discount. |
| Other | Anything else. |
Vendor credit statuses
Section titled “Vendor credit statuses”- Draft: being entered. You can still edit it, and it can’t be used yet.
- Open: approved, and none of it has been used.
- Partial: some of the credit has been used, and some is left.
- Closed: all of the credit has been used.
- Void: cancelled; it no longer counts for anything.
Use Approve Credit to move a draft to Open. An open credit that hasn’t been used yet can be Rescinded back to Draft to edit it, or Voided. Once any of it has been applied or refunded, it can no longer be rescinded or voided. Partial and Closed are set for you as the credit is used.
Using a credit
Section titled “Using a credit”There are two ways to use a credit’s remaining balance, and you can mix them:
- Apply it to a bill. This takes the amount off one of the same payee’s approved bills, with no money changing hands. A credit tied to a project can only be applied to that project’s bills; a credit for the payee as a whole can be applied to any of them. The bill moves to Partial or Paid the same way a disbursement would. A credit can be spread across several bills, one application at a time.
- Record a refund. If the payee pays the money back instead, record it as a refund: the amount, the date you received it, the method (check, wire and so on) and an optional reference.
You can undo either one. Removing an application puts the amount back on both the bill and the credit; removing a refund puts it back on the credit.
On the bill
Section titled “On the bill”A bill with credits applied shows Credited next to Amount Paid, and its Balance is what’s left after both. A Credits tab lists each credit applied to it; the arrow at the end of a row opens that vendor credit. Recording a disbursement starts from that balance, so you won’t pay for what’s already been credited.
If the payee has unused credit that could go toward it, an approved bill with a balance tells you so (“Acme Supply has $300.00 in available credit”) with an arrow that opens the payee, whose Credits tab lists them, so no one pays a bill in full while credit sits unused. A credit tied to a different project isn’t counted, since it can’t be applied to this bill.
In your figures
Section titled “In your figures”Unused vendor credit comes off Outstanding Payables on Firm Health, and shows as a negative line in the Accounts Payable Aging report so the two still match. Vendor credits also come off bill cost on a project’s Profitability tab and in the financial Reports.