Vendor Credits

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 said vendor at a later date i.e refunded, or subtracted from any future bill amount due to that vendor.

In a normal 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

  1. 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 simply by recording this amount as a vendor credit. When you 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 of this and he issues a credit note towards the value of 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

Creating a vendor credit

Vendor credits can also be created by selecting a vendor from the Contacts tab. Select New transaction - Vendor credits to record the credits received from that vendor.

New vendor credit

You can view and edit these anytime by scrolling down the Purchases tab to view Vendor credits. Clicking on the pencil icon highlighted below lets you edit the credit recorded.

Editing a vendor credit

Mandatory fields

You will need to enter the following information while recording vendor credits.

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,

Applying credits to bill

This can also be done by opening the corresponding bill and selecting Use credits.

Use credits

With a refund

If you’ve received a direct payment from the vendor towards the amount owed to you, you can record this in Zoho Books against the corresponding vendor credit note created. To do this,

Recording a refund

The payment recorded can be deleted by scrolling down till you see the Refund history. Click on the trash icon next to the recorded payment to delete the payment. The credit note status is changed to Open.

Deleting the payment

Tracking Inventory

If you have enabled inventory for your organisation 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.

Other actions

Other actions

Filtering vendor credits

Custom Views

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.

Custom view of invoices

To create a Custom View:

Your new custom field will now be listed under Created By Me, in the dropdown. s

TOP