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lisa_u
April 25, 2025
Question

How to deduct a credit from a supplier's payment without applying it to a specific invoice

  • April 25, 2025
  • 1 reply
  • 0 views

I don't know if this is possible, but we'd like to show a supplier credit being deducted from a payment but not applying it to an invoice.  Last month we received the credit note.  But the invoice that the credit goes with is from last year.  So I'd have to apply the credit to a current invoice in order to claim it, but that's not actually what has happened.

 

It would be more helpful if the cheque stub showed the credit note number and amount rather than paying a lesser amount on an invoice that has nothing to do with this credit. 

 

Has anyone found a way around this?

1 reply

F
FaithA
April 25, 2025

Hi, Lisa. We can create a clearing account to temporarily deposit the credit amount, create a vendor credit, then a bank deposit, and then link them to clear it out and finally create a cheque. Let me guide you through the process.

 

In QuickBooks Desktop (QBDT), we can't directly deduct a credit from a supplier's payment because supplier credits must be applied to open invoices (or bills) or transactions affecting Accounts Payable (A/P). However, you can manage this by setting up a Vendor Credit Clearing account where you can temporarily deposit the credit amount, and then use this clearing account when writing checks.

 

First, we need to set up a temporary clearing account to manage the credit. Follow these steps:

 

  1. Go to Lists, and then Chart of Accounts.
  2. Click Account at the bottom left and select New.
  3. Choose Bank as the account type.
  4. Name the account (e.g., "Vendor Credits Clearing Account").
  5. Click Save & Close.

 

Next, deposit the vendor credit into the clearing account:

 

  1. Go to Banking, then Make Deposits.
  2. In the Deposit To field, select the Vendor Credits Clearing Account.
  3. Choose Accounts Payable in the From Account column.
  4. Enter the vendor name and the amount of the credit.
  5. Click Save & Close.

 

Now, link the vendor credit to the bank deposit to clear it out correctly:

 

  1. Go to Vendors, then Pay Bills.
  2. Select the deposit you just recorded.
  3. Click Set Credits to apply the vendor credit to the deposit.
  4. Click Done and then Pay Selected Bills.

 

Finally, write the cheque using the newly created clearing account:

 

  1. Go to Banking, then Write Checks.
  2. In the Bank Account field, select the Vendor Credits Clearing Account.
  3. Enter the supplier name.
  4. Enter the amount you want to pay using the credit.
  5. In the memo, you can note the credit note number and other relevant details.
  6. Click Save & Close.

 

Following these steps ensures that the supplier credit is properly documented and the cheque stub reflects the credit note details without applying it to a specific invoice. 

 

As a future reference, you can refer to this insightful article to help you reconcile your accounts so they match your bank and credit card statements: Reconcile an account in QuickBooks Desktop.
 

Please feel welcome to reply to the thread anytime you need further assistance or have additional queries. The Community team will stay in the loop and will be ready to assist you in managing your supplier payments.

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