I raised a credit note for a customer, and we will physically pay this to the customer, how do I enter this bank payment on the sales ledger, against the credit note?

Greetings, @minlee2001.

Welcome to the Community. I’m here to help create a transaction and apply it against the customer’s credit note in QuickBooks Online.

If you haven’t entered a credit note yet, follow the steps below:

1. Go to the Plus icon and select Credit Note.
2. Choose customer from the drop-down.
3. Fill out other necessary fields.
4. Select the item under the Product/Service column.
5. Enter Qty, Rate, Amount and VAT.
6. Hit Save and close.

Right after, create an expense transaction. Here’s how:

1. Go to the Plus icon and select Expense.
2. Choose customer from the Payee drop-down.
3. Under Category column, select Debtors.
4. Enter amount.
5. Hit Save and close.

Once done, use the Receive Payment option to link the two transactions. Let me show you how:

1. Click the Plus icon and select Receive Payment. 
2. Select customer from the drop-down.
3. On the Outstanding Transactions section, select the Expense transaction.
4. Place a check mark next to the Credit Note under the Credits section.
5. Hit Save and close.

Check out the following articles for reference:

• Enter and apply a credit note or delayed credit.
• How to enter, edit, or delete expenses.
• How to record customer payment.

That should answer your concern for today.

Let me know if you have any issues after following those steps. I’m always here to help you out. Have a good one!