Issuing credit from Accounts Payable to Accounts Receivable
Your vendor issues credit for work that you performed and invoiced.
Ideally, your vendor should send you a check for the amount that you invoiced them. If this is not possible, then use the following procedure to adjust the vendor credit to Accounts Receivable and there apply it to the appropriate invoice.
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Enter a vendor credit for the amount of the credit received (Vendors menu > Enter Bills > Credit toggle).
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Post the vendor credit to Accounts Clearing. Save & Close.
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Now the credit is in Accounts Payable and can be applied to the vendor's existing bills.
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Record a General Journal Entry (Company > Make General Journal Entries).
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Select Accounts Clearing on the first line.
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Enter the credit amount in the DEBIT column.
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Enter a descriptive memo.
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Select Accounts Receivable on the second line.
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Enter the credit amount in the CREDIT column.
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Enter a descriptive memo.
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Select the vendor's CUSTOMER name in the NAME field.
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Save and Close.
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Now the credit is in Accounts Receivable and can be applied to the customer's existing invoices.
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Open the applicable Invoice and click Apply Credits to apply available credits.
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