Create Vendor Credits

You can create vendor credits in Zoho ERP to record refunds, adjustments, or credits received from your vendors. Vendor credits help you reduce payable amounts by applying them to future bills or recording refunds, ensuring your accounts payable and financial records stay accurate.

Methods to Create Vendor Credits

Zoho ERP offers multiple ways to create vendor credits, so you can record them based on how you receive credits from vendors or how your purchase workflow is set up. You can choose the method that best fits your process, whether the credit originates from a bill, a bank transaction, or an external system.

The following methods are available to create a vendor credit:

From the Vendor Credits module: Create a vendor credit directly by entering the credit details manually. This is useful when you receive a credit note or adjustment from a vendor.
From the Vendor Details page: Create a vendor credit from a specific vendor’s details page, ensuring the credit is directly associated with that vendor.
From the Banking module: Convert a bank transaction, such as a refund received from a vendor, into a vendor credit for proper accounting.
From Bills: Create a vendor credit directly from a bill when a vendor issues a credit for returned items, overcharges, or adjustments.
Import: Import vendor credits in bulk using a file, which is helpful when migrating data or recording multiple credits at once.
Using the API: Create vendor credits programmatically by integrating Zoho ERP with external systems or automating credit creation through custom workflows.

Create From Vendor Credits Module

You can create a vendor credit manually from the Vendor Credits module in Zoho ERP by entering the vendor details, credit date, reference number, line items, taxes, and other relevant information.

To create a vendor credit from the Vendor Credits module:

Go to Purchases on the left sidebar.
Hover over Bills in the Modules bar and select Vendor Credits from the dropdown.
Fill in the following:

Vendor Details

Vendor Name: Select the vendor for whom you’re creating the vendor credit. If the vendor does not exist, you can create a new one directly by clicking + New Vendor from the dropdown. Once you select a vendor:
The vendor’s currency and billing address will be displayed.
If GST is enabled for your organization, the vendor’s GST treatment and GSTIN will be displayed. You can edit these details by clicking the Edit icon next to them if required.

Credit Note Details

Credit Note#: Enter the unique number for this vendor credit. If you want the vendor credit number to be auto-generated, click the Gear icon next to the field, select Continue auto-generating vendor credit numbers, enter the required Prefix and Next Number, and click Save.
Order Number: Enter the order number used as a reference for the vendor credit.
Vendor Credits Date: Enter the date when you’ll create the vendor credit.
Subject: Enter a short description or subject for the vendor credit (up to 250 characters) to help identify it easily.
- Accounts Payable: The account through which you’ll track the amount you owe vendors for the vendor credit created.

Item Table

Once you’ve added the required details, click Save.
Item Details: Select the item for which the vendor has issued a credit.
Account: Choose the expense or asset account to which the credited amount should be adjusted.
Quantity: Enter the quantity of the item being credited by the vendor.
Rate: Enter the rate per unit of the item as mentioned in the vendor credit.
Discount: If discount is calculated at the line-item level for the vendor credit, enter the discount applied by the vendor for each item.
Amount: The amount is calculated automatically based on the Quantity and Rate.

Click + Add New Row to add more rows to the item table.

Total

Discount: If discount is calculated at transaction level for the vendor credit, enter the discount you received from your vendor.
Adjustments: Add rounding differences or additional adjustments if needed.

Other Details

Notes: Add notes related to the vendor credit. These notes will appear on the PDF version of the vendor credit.
Attach Files: Upload supporting documents such as vendor invoices or receipts. You can upload up to 5 files, with a maximum file size of 10 MB per file.
Save the Vendor Credit.
- Save as Draft: Save the vendor credit without making it available for application or refund.
- Save as Open: Save and mark the vendor credit as open, making it available to apply to bills or process a refund.

Apply Vendor Credits to Bills

Once you’ve created vendor credits, you can apply them to bills recorded for the same vendor. Doing so will reduce the amount you need to pay for the bills.

To apply vendor credits to bills:

Go to Purchases on the left sidebar.
Hover over Bills in the Modules bar and select Vendor Credits from the dropdown.
Click the vendor credit you want to apply to bills.
Click Apply to Bills at the top. A list of the bills created for that vendor will be displayed.
Enter the amount against the desired bill balance. The amount can also be split among multiple bills.
Click Save once you applied the credits.

You can also apply vendor credits directly to a bill. Here’s how:

Go to Purchases on the left sidebar.
Hover over Bills in the Modules bar and select Bills from the dropdown.
Click the bill for which you want to apply credits.
Click the More icon and select Use Credits. Or click Apply Now next to the Credits Available section.
Enter the Credits to Apply and click Save.

Edit Vendor Credits

You can update the details of vendor credits by editing them. Here’s how:

Go to Purchases on the left sidebar.
Hover over Bills in the Modules bar and select Vendor Credits from the dropdown.
Click the vendor credits you want to edit.
Click Edit at the top.
Make the necessary changes and click Save.