What is Vendor Credit?

A Vendor Credit is a credit issued to the vendor. Occasionally, goods purchased from a Vendor need to be returned due to reasons such as wrong item, faulty product, etc. In such cases, a Vendor Credit can be created.

It's important to note that if the vendor credit contains inventory items, they are also picked from the system.

Once the Vendor Credit is created, it can be used in one of two ways:

Applied to a Future Bill: The credit amount can be applied to a future purchase from the vendor. This reduces the total amount owed on the next bill.

Refunded to the Vendor: In some cases, the customer may request a refund for the credit amount instead of using it towards future purchases.

The vendor credit memo process involves various status indicators that indicate whether the credit is available to be used on a bill, already used, or refunded to the vendor.

Vendor Credit Statuses

• Open: This status indicates that the vendor credits are neither applied nor refunded.

• Partially Applied: This status indicates that the vendor credits have some amount applied to a Bill and may have some refunded.

• Partially Refunded: This status indicates that the vendor credit has some amount refunded and none applied to a bill.

• Applied: These are the vendor credits that have been fully applied to a bill.

• Refunded: If the vendor credit amount has been completely refunded, it enters the "Refunded" status.

Creating Vendor Credit

When entering a vendor credit, you'll begin by entering the header-level information, such as the store, vendor details, account, and reference number. Once the basics are set, you can add item(s) and proceed with the credit process.

To create the vendor credit, go to Menu > Purchase > Vendor Credit

Vendor Credit Header Fields

Section	Field	Description
Main	Select Store	Select the store from where you want to return the item from.
Main	Date	Select the date of the vendor credit.
Main	Select Vendor	Select the vendor. Click for more details on the selected vendor.
Main	Total Credit	This field displays the total credit amount of the vendor credit.
Main	Select Account	Select the accounts payable for this credit.
Main	Credit Used	This field shows the amount of credit used from the total credit.
Main	Ref No	Enter a reference number, if required. This is typically the vendor’s credit number.
Main	Project/Class	Select a project or class to associate this vendor credit with.
Footer	Memo	This field provides space for writing notes or any additional information related to the vendor credit.
Footer	Exchange Rate	If the vendor credit is for a foreign customer, the "Exchange Rate" field allows you to specify the conversion rate for currency exchange.

Adding Lines to Vendor Credit

After inputting the header-level information in the vendor credit, you'll proceed to enter line-level details, which encompass adding the item(s) returned to the vendor. In case no product returns are involved, you can add non-inventory or service item(s). In the line-level section, you can add individual items and specify their quantities, unit cost, and applicable taxes.

Vendor Credit Details Header Fields

Section	Field	Description
Items	Item Type	Specify the type of item you want to add to the vendor credit- Inventory, Non-Nnventory, Service or Labor.
Items	Item Number	This field allows you to search for and add the item to the vendor credit.
Items	Rate	Enter the price of the item you are adding to the vendor credit.
Items	Qty	Enter the quantity of the item that you are adding to the vendor credit.
Items	Tax	Select the tax code of the item you are adding.
Items	Project/Class	Select a project or class to associate this credit memo line with.
Expense	Account	Select an account for adding an expense line.
Expense	Tax	Select a tax code for adding an expense line.
Expense	Amount	Enter an amount here for adding an expense line.
Expense	Project/Class	Select a project or class to associate this expense line with.
Expense	Memo	This field allows you to add any additional information or notes, if required, for adding an expense line.
Tax Adjustments	Tax Adjustment Item	Select the tax type to adjust.
Tax Adjustments	Adjustment Amount	Enter the amount to adjust by, negative or positive.
Tax Adjustments	Memo	Enter a memo for the adjustment, if required.

Vendor Credit Details Line Fields

Field	Description
Amount	Displays the calculated amount, which is the result of (Unit Price * Qty+Tax Amount).
Description	This field displays the description of the item.
Item#	The unique identifier for the item.
Item Type	This field specifies the type of item, such as inventory, non-inventory, etc.
Notes	This is an editable field that allows you to add any additional information related to the return.
Project/Class	This field shows the project or class associated with the item line.
Qty	This is an editable input field that specifies the quantity of the item.
Re-stocking Fee	This field allows you to add an absolute or percentage re-stocking fee for the item.
Tax	This is the tax code of the item you are adding.
Tax Amount	Displays the calculated tax amount for the item.
Unit Cost	This is an editable input field that allows you to edit the unit cost for the item.
Uom	Specifies the unit of measure for the item (liter, unit, kilogram, etc.).

After adding item(s), click on the "Save" button to create a vendor credit. The system will automatically assign a unique number to the invoice credit memo in the format of VC-V000001, where "VC" denotes the sales store code and 1 denotes a sequential series. This number will be displayed on the top left corner of the page. Once this number is generated, it becomes a permanent identifier and cannot be altered.

Voiding a Vendor Credit

If you have created a vendor credit with incorrect details or in error, you have the option to void it. The process of voiding a vendor credit essentially entails reducing the credit's value to zero. This is achieved by removing specific item lines from the vendor credit and putting the inventory back into the stock.

To remove the non-inventory item, right-click on the item line and click on "Delete" to remove it.

For inventory items, click on the item's quantity, which will open the "Add/Change Vendor Credit Qty" screen. From there, select the location and choose the quantity to "Put Away".

Once all item lines have been successfully removed, navigate to the "Options" menu and select "Void" to complete the process of voiding the vendor credit.