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shelly-wilsonair
March 26, 2019
Question

I have a customer who is also a vendor. How to I apply a vendor credit to a customer invoice with Quickbooks Online

  • March 26, 2019
  • 2 replies
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I have a customer who is also a vendor.  How do I apply a vendor credit to a customer invoice with Quickbooks Online in Canada.  Step by step would be greatly appreciated!

    2 replies

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    LauraAB
    March 26, 2019

    Hi shelly-wilsonair,

     

    I can help you sort out these transactions. Customers and vendors, as well as the related transactions, are separate from each other in QuickBooks. That means there isn't a way to apply a vendor credit to a customer invoice. If you have a bill and an invoice, each would be closed out independently from one other without the use of any credits to offset one another.

     

    I want to make sure you're handling your transactions as needed, so I encourage you to reach out to your accountant to make sure everything is as entered correctly. Perhaps our accountant users here in community can help shed some light on this situation, too.

     

    Vendor credits mean that you've overpaid the vendor or have returned a product to them. For this, they've given you a credit for your next bill so that you don't pay as much. Read the manage supplier credits article to learn more. I suspect that you may not even need it in this case since it sounds like it could have been created to account for the difference from your customer and vendor transactions. It's for this reason that I recommend speaking with your accountant.

     

    As for your open customer invoice, simply record a payment using the steps outlined in the how to create an invoice article to close out that transaction.

     

    If you're not feeling certain about what you need to do, your accountant can even be added as an accountant user to take a closer look at how things are currently set up. That way they'll be able to see the best way to move forward. QuickBooks Online can also help you find an accountant through the Find a pro to help tool in the My Accountant tab.

     

    I hope that helps. Let me know if you have more tech questions about QuickBooks!

    A
    Anonymous
    March 27, 2019

    As LauraAB said - you cant direclty link customer and vendor transactions.

    Instead use a manual bank account for "offset+clearing", then record a customer payment (or sales receipt) IN  and  a vendor bill payment (or check disbursement) OUT in equal amounts thru this bank account.

      M
      Mobibooks
      March 24, 2021

      I am an accountant and use of a clearing account is a good way to treat this type of contra transaction that way your sales and expense are recorded accurately. Just be sure to include a memo on the transactions for your accountant to refer to. 

        G
        gjprince
        March 9, 2021

        I just put a period at the end of the name so I can distinguish the customer from the vendor.  As long as you are consistent in doing this, it will work nicely

         

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          LauraAB
          March 9, 2021

          Hi gjprince,

           

          Thanks for stopping by to share your input on how you set up a customer that is also a supplier to differentiate the name slightly in QuickBooks Online. You're right, it's about finding a system that works for you, and I'm glad you've got a system for your books. I'd also like to further clarify how this can be done so that everyone can decide the best way to make the names different for them.

           

          For things like drop-down menus and transaction sorting, QuickBooks Online uses the Display name as field on your customer or supplier setup. This is the field that you'll want to ensure is different in your books so that the program understands where to categorize your transactions and ensure that you don't accidentally assign the wrong one to the wrong name type. Don't worry, it's not the name your customers or suppliers would see on their copies of their forms.

           

          As an example, you could put a name as John Doe (Customer) and then John Doe (Supplier) in the Display name as fields on their respective profiles to enter the same person as both a customer and a supplier. If you do this, I also recommend being mindful of the Print on cheque as field, which uses the Display name as field by default. You can simply uncheck the box if you don't want it to also display on a cheque in that way.

           

          In doing this, you can use the first, last, and middle name fields and have the same name as many times as you'd like in your customer and supplier lists. So long as the name is different in the display field, you'll be good to go.

           

          If you happen to be using QuickBooks Desktop, the program behaves in the same way in that it'll only allow you to use a name once. In this case, you can use the Customer name or Vendor name fields at the top of the Edit customer and Edit vendor windows to slightly change the names.

           

          I hope this helps expand on the options available!

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