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Dedicated
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
Chapter 23
Chapter 24
Chapter 25
Chapter 26
Chapter 27
Chapter 28
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When the vendor pays you

If you must sometimes issue credit memoranda or refunds to customers, there may be some solace when a vendor does the same for you. 

Enter Bills is used for vendor credits, by clicking the Credit button.

Note carefully the two sides of this transaction:

1.  The debt of your accounts payable is reduced.  This is the same as if you had paid a bill.

2.  Expenses are reduced, or if assets were returned to the vendor, an asset account is reduced.  As far as this aspect is concerned, the transaction is over and done with. 

Positive amounts are used in recording a vendor credit, which appears as a negative in the Payables register.

Now the vendor owes you money.  Getting deeply philosophical, one of two things will happen:

1.  The vendor will pay you.

2.  The vendor will not pay you.

If the vendor will not pay you, you can take matters into your own hands.  This can be done simply when paying for the next purchase.  The Pay Bills window will show the vendor credit, which can be checked. It will become a negative item on the bill payment  check. If this check is edited, the credit will not show separately on the display.  The credit will print separately on the check, in QuickBooks 3.1 and later.  (In the earlier versions, it is useful to print a report Unpaid Bills by Vendor,before paying the bill.) 

Refund check may be sent by the vendor. The vendor has sent you something of value, and this can actually be recorded as a bill, but that is cumbersome. The check can be merely deposited, but carefully.  The opposing account must be the Payables account, and the Customer:job field must contain the vendor name.  No choice. This entry has nothing to do with reduction of expenses; it is a transfer between Payables and the bank account.  The reduction in expenses shows in the credit memo.

Pay Bills will link the vendor credit and the deposit of the vendor check.  You may need to click Show All Bills.   The credit should show as negative, and the check as positive. Click on these two lines, and then click OK.  This time, the Pay Bills function will not add a transaction in the bank account.  It will have its effect in Payables, where both the DEP and the BILL CRED will show as paid.