Vendor Credits

What are Vendor Credits?

Vendor credits are an equivalent of money that you pay in advance to your vendors. These “credits” can be applied to your bills that you create for your vendors. This helps you track the money you’re owed until it is either paid by the vendor or adjusted in future bill amounts for the vendor.

Practically, the vendor issues you credits via a vendor credit. You can record this in Zoho Books as Vendor Credits and track the money you’re owed.

When to record a vendor credit in Zoho Books

  1. You make an advance payment to your vendor, and the final bill amount comes out to be lesser than the amount you paid. The vendor keeps the rest of the money and issues equivalent credits in your name. You can apply it to the next bill in the vendor’s name, the bill amount is reduced accordingly.

  2. Your vendor just sent you the ten boxes of phones you ordered, but two of those boxes contain damaged phones. You inform him/her of this and he/she issues a vendor credit towards the value of those two boxes. He/She will apply these credits to the next invoice sent to you.

Status of a Vendor Credit

A vendor credit created in Zoho Books can have any one of the following statuses:

Status Description
Draft The vendor credits that you’ve saved as draft will be in the Draft status. Vendor credits in draft status will not have any impact in accounts, inventory or reports.
Open The vendor credit has been created and is due for payment by the vendor.
Closed The vendor credit has been accounted for, either through a refund or by associating it to a bill.
Void The vendor credit has been made invalid.

Creating Vendor Credits

You can also create vendor credits directly from the Contacts page. Here’s how:

Fields Description
Vendor Name The vendor from whom you receive the credit.
Credit Note# The unique number assigned to each credit note. You can choose to auto generate your credit note number by clicking the Gear icon next to this box.
Order Number Enter an optional order number for your reference.
Vendor Credit Date The date on which you create the vendor credit.
Item Details Item(s) against which you create the vendor credit.

New Vendor Credit

Closing a Vendor Credit

Applying to Bills

Vendor credits can be applied to a bill raised for the same vendor. Doing so will adjust the bill amount accordingly. There are two ways of applying vendor credits to bills:

Method 1:

Method 2:

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

Recording a Refund

If your vendor directly pays you the amount he/she owes you, you can close the corresponding vendor credit created in Zoho Books by recording a refund. Here’s how:

The status of the vendor credit will change to Closed.

View or Undo the Refund

Refund History

If you delete the refunded amount, the status of the corresponding vendor credit will change to Open.

Tracking Inventory

If you have enabled inventory for your organization and raise a vendor credit towards returning some items to a vendor, your stock quantity will automatically be adjusted when you record the vendor credit.

This will come handy for scenarios where you need to return damaged goods to your vendor, but have already recorded these as stock in Zoho Books. You don’t need to manually adjust this quantity when you return the goods. Instead, specify the quantity while recording the credit, and this will automatically be adjusted in your Zoho Books items list.

Learn more about Inventory in Zoho Books.

Other Actions

After creating a vendor credit, you can perform the following actions on it:

Action Description
Edit Change data in the existing vendor credit.
PDF Download the vendor credit in PDF format.
Print Print a copy of the vendor credit.
Attach Attach up to 5 files, each of 5 MB, to your vendor credit.
Void The vendor credit will be invalid. This action can be reverted by selecting the vendor credit, clicking More and selecting Convert to Open.
Delete Delete vendor credits by clicking More and selecting Delete.

Vendor Credits Actions

Filtering Vendor Credits

Vendor credits can be filtered and viewed according to the status of the vendor credit. Here’s how:

Filter Vendor Credits

If you want to customize your view, click + New Custom View.

What are Custom Views?

Custom Views are filters to view your vendor credits based on a 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 SAR.

With Custom Views, you can create this filter. All you have to do is set criteria(s) and later use it to classify data.

Filter Vendor Credits

Your new custom view will now be listed under Created By Me, in the drop-down.

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