How to Handle a Supplier Mistake in QuickBooks

Question: I have a credit from a supplier for a mistake in an order. How do I enter that in QuickBooks?

Answer: To enter a credit from a supplier in QuickBooks Premier to be used at a later time, follow these instructions:

• Go to "Enter Bills."
• Click "Credit" at the top of the screen.
• Enter vendor.
• For the expense account (instead of the "items" tab), enter your cost of goods sold account.
• Click "Save and Close."

Then, when you have an invoice from that supplier to which this credit will be applied:

• Create the bill from the supplier as usual.
• Go to "Pay Bills" to record payment and select that bill.
• Near the bottom right of that screen, you should see “Total Credits Available” and the amount of the credit you recorded previously.
• Click “Set Credits” and the credit will be applied to the bill, reducing the amount owed by the amount of the credit.
• Record the payment as usual.

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