- What are vendor credits?
- Creating vendor credits
- Closing a vendor credit note
- Tracking Inventory
- Other actions
What are vendor credits?
Vendor credits are credits that you receive from your vendor, and is treated as an equivalent of physical cash that the vendor owes you. This helps you track the money you’re owed until it is either paid by the vendor at a later date i.e refunded, or subtracted from any future bill amount due to that vendor.
In a general scenario, the vendor issues you credits via a credit note. You can record this in Zoho Books as a vendor credit note and track the money you’re owed.
When to record a vendor credit in Zoho Books
Change in Amount: You make an advance payment to your vendor, and the final bill amount comes out lesser than the amount you paid. The vendor simply keeps the rest of the money and issues equivalent credits in your name. You can track this in Zoho Books by simply creating a vendor credit for the amount. This vendor credit can be applied to the next bill in the vendor’s name and the bill amount is reduced accordingly.
Change in Quantity: Your vendor sends you the ten boxes of phones you ordered, but two of those boxes contain damaged phones. You inform him about this and he issues a credit note towards the value of the phones in those two boxes. He will apply these credits to the next invoice he sends you, but how do you track this internally to make sure he does? The answer is vendor credits.
Creating vendor credits
- Log in to your Zoho Books account.
- Go to the Purchases module on the home page.
- Click on Vendor Credits.
- Select New on the top of the page to create a new vendor credit.
- You can alternatively click on the “+” next to the Vendor credits tab.
Vendor credits can also be created by selecting a vendor from the Contacts tab. Select New transaction and click on Vendor credits to record credits received for that vendor.
You can view and edit these anytime by selecting any particular vendor credit and clicking on the Edit button on top of the page.
You will need to enter the following information while recording vendor credits.
- Vendor name - The vendor you receive the credit from.
- Credit note # - Unique number assigned to each credit note. You can choose to auto generate your credit note number by clicking on the gear icon next to this box.
- Item Details - Items towards which you want to create the vendor credit.
Closing a vendor credit note
By applying to bill
Vendor credits can be applied to a bill raised for the same vendor. Doing so will reduce the bill amount accordingly. To do this,
- Select any vendor credit note that you created and select the option Apply to bill on top of the page.
- A list of the bills raised for that vendor is displayed. Select the appropriate one and specify the amount to credit and click Save..
- The bill amount and the vendor credit are reduced accordingly.
- If all the credits are used up, the status of the note will be changed to Closed.
Alternatively, Vendor Credits can be directly applied to Bills for the particular vendor:
- Select the Bills under the Purchases module.
- Click on the particular bill and select More on top of the page.
- Click on Use Credits and enter the amount to apply.
- Click on Save.
With a refund
If you’ve received a direct payment from the vendor towards the amount owed to you, you can nullify the vendor credit note created for that vendor. To do this,
- Open the vendor credit note.
- Select More.
- CLick on Refund.
- Specify the refund date and amount refunded and Save it.
- The payment is recorded and the credit note is closed if the refund amount is equal to the credit note amount.
You can see the amount refunded by scrolling down till you see the Refund history. To edit it, click on the edit icon next to the amount refunded. To delete it, click on the delete icon next to the amount refunded.
If you have enabled inventory for your organization and raise a credit note towards returning some items to a vendor, your stock quantity will automatically be adjusted when you record the credit.
This is handy for scenarios where you need to return damaged goods to your vendor, but have already recorded these as stock in Zoho Books. You do not need to manually adjust this quantity when you return the goods. Instead, simply specify the quantity while recording the credit, and this will automatically be adjusted in your Zoho Books items list.
Learn more about inventory here.
Void - You can void vendor credits by opening the credit note and selecting More > Void. The note will be rendered invalid. This action can be reverted by selecting the void note and clicking on More > Convert to Open.
Delete - You can delete vendor credits by opening the credit note and selecting More > Delete.
Print - You can print a copy of the vendor credit by opening it and clicking on the ‘Print’ icon on the top left corner.
PDF - Download the vendor credit in portable form by simply opening it and selecting the ‘PDF’ icon on the top left corner.
Vendor Credis can be filtered based on their status:
- Draft - Vendor credits can be saved in the draft state before converting them to open.
- Open - The vendor credit has been created and is due payment by the vendor.
- Closed - The vendor credit note has been accounted for, either through a refund or by associating it to a bill.
- Void - The credit note has been made invalid.
Custom Views are specific filters to list your vendor credits, based on your criteria.
For example, out of all your vendor credits in Zoho Books, you might want to view those vendor credits that are greater than $1000.
With Custom Views, you can simply create this filter. All you have to do is set criteria and later use it to classify data.
You can find an example GIF image to understand how custom views work.
To create a Custom View:
- Go to the Vendor Credits module under Purchases.
- Select All Vendor Credits on top of the page and click on + New Custom View.
- In the following page, give an appropriate Name to your view, define the Criteria and select the columns in Column Preference (i.e. columns which you want to see in the filtered results).
- Click Save.
Your new custom field will now be listed under All Vendor Credits in the dropdown.