Solved

How to apply vendor credit to customer invoices

Forum|Forum|5 years ago
February 2, 2021
1 reply
0 views

We receive payments from a vendor which includes credit card commissions, bonuses and maintenance payments for our customers. The customers maintenance fees are withdrawn by the credit card vendor for us.

I need to pay sales tax on the maintenance and the commissions and bonuses are other income. I want to track the all the activity by customer so we can see the profit we make from each customer. Currently we do not invoice the maintenance contracts as I have not been able to figure out how to apply the payment from this vendor to a customer's invoice. The vendor pays us monthly. Can someone offer a fairly simple approach on how to do this. I have thought of a couple of workarounds but it would be a chore to post this each month. Any ideas are welcome.

Thank you in advance for your response.

QuickBooks Desktop

Best answer by LieraMarie_A

Not to worry, @KeithOakley. I'm determined to ensure you can apply vendor credit to customer's invoices.

The best way to handle this in QuickBooks Desktop is to use a clearing account to help transfer or apply a vendor credit to customer's invoices. I'll guide you how.

Create a Bank account called Clearing Account.
1. From the Lists menu, click Chart of Accounts.
2. In the Chart of Accounts window, right-click anywhere and select New.
3. Choose Bank for the Account Type.
4. In the Account Name field, enter Clearing Account.
5. Click Save & Close.
Create two journal entries.
1. From the Company menu, click Make General Journal Entries.
2. Debit the Clearing account (created in Step 1) and credit Accounts Receivable for the amount of sale.
3. In the Name field on the Accounts Receivable row, enter the customer name created in QuickBooks Desktop.
4. Click Save & New.
5. Create a second general entry. This time, debit Accounts Payable and credit Clearing Account for the amount of the sale.
6. In the Name field on the Accounts Payable row, enter the vendor name that needs the bill credit created.
7. Click Save & Close.

Then, apply the credit to an invoice

From the Customer menu, select Receive Payments.
Select the invoice.
Click Set Credits and select the credits to apply.
Select Done.
Then, click Save an close.

However, I'd still recommend seeking professional advice from your accountant about this. They can help you properly handle this type of scenario. If you don't have one, not to worry! I can help run a search to find an accountant.

Here's how:

Visit the ProAdvisor site.
Enter your city or ZIP code in the Location field. It will display a list of accountants or bookkeepers near you.
You can also filter the service provided, industry served, and product supported to narrow down the results.

Feel free to visit the Community again if you need help with QuickBooks. We're always here to help. Have a great day ahead.

Jen_D

Thanks for posting here, @KeithOakley,

This scenario is a special case in QuickBooks. Currently, we're unable to apply vendor credits into sales transactions.

If in case you receive a bulk deposit from a vendor comprising the credit amount for bills and customer invoices, you can record it as a deposit. Using the bank deposit will let you split or apply the whole amount to expense or sales transactions.

Here's how:

Click the Banking icon and choose Make Deposits.
In the Received From column, add the customer name.
For the From Account column, use Accounts Receivable to apply the deposit to a customer invoice.
Add the amount then press Save and close.