What is a vendor credit?
A vendor credit — shown in Ambrook as a debit memo — is a credit you receive from one of your vendors. It reduces the amount you owe on a bill without voiding or replacing the original bill. Some examples of when you might receive a vendor credit include:
A vendor under-delivered on an order (short shipment, damaged or returned goods)
A vendor issued you a refund or discount after billing
You were overbilled (a duplicate bill, or a data-entry error on a bill)
You returned parts or product for credit toward a future purchase
A vendor credit reduces the amount due without recording a payment. If a vendor credit reduces the balance of an open bill to $0, the bill's status changes to paid.
This is the accounts-payable mirror of a credit memo, which represents a credit you owe your customers.
This article covers how to create vendor credits and apply them to bills.
How to create a vendor credit
There are several ways to create a vendor credit:
From the Bills tab
Navigate to Bills and select the Debit Memos tab, then click "+ New"
From the Ledger
In the Ledger, select the "New" button and choose Debit Memos.
Debit Memo Details
When creating a new vendor credit:
Select the vendor who issued the credit
Enter the amount of the credit
Enter the date of the credit
Optionally, add a description as the reason for the credit
Tag the credit with any tags you'd want to credit against (typically the same category as the original purchase)
After creating the vendor credit, you can download it by clicking the download icon or through the more menu. There's also an option to print it from there.
How to apply a vendor credit to a bill
There are three ways to apply a vendor credit.
From the Bills > Debit Memos tab
Navigate to the Bills tab
Select a debit memo from the "Open" tab
Click the "..." at the top right
Select "Apply Debit Memo"
From the bill editor
If a selected vendor has open vendor credits, you'll find them at the top of the "Bill Options" section when creating a new bill, or editing an open bill, for that vendor. Select a vendor credit to apply it to the bill.
From the Bills list
To apply a vendor credit to an existing bill, select match payment on the bill. If the vendor has open vendor credits, the match screen will show them and auto-apply them. You can choose not to apply a credit by unchecking it.
A vendor credit can also be partially applied — if the credit is larger than the bill, the remaining balance stays on the memo and can be applied to future bills.
Applied vendor credits
Applied vendor credits can be found on the Debit Memos page, under the "Applied" tab. Bills with an applied vendor credit will show the credit as part of the payments matched to them.
View your vendor credit balances
There are several ways to see your open vendor credit balance at any time:
Navigate to Bills → Debit Memos. The Open tab lists all your open vendor credits, with the total open balance shown next to the New button.
Navigate to Accounts and select Debit Memos under Accrued Liabilities.
You can also view the vendor credit balance per vendor by navigating to Contacts, selecting the vendor, and scrolling to the AR/AP section.
Cancel a vendor credit
To cancel a vendor credit, click the more menu icon on an open debit memo and select cancel debit memo. Note that only open vendor credits can be canceled. Canceled credits appear in the "Canceled" tab.
FAQs
Can I apply one vendor credit across multiple bills?
Yes. If a vendor credit is larger than the bill you apply it to, the remaining balance stays on the memo and can be applied to future bills for that vendor.
Can I edit a vendor credit after I've created it?
You can edit an open vendor credit — one that hasn't been applied to a bill yet. Once a credit has been applied, you'd need to unmatch it from the bill first. To remove an open credit entirely, use cancel debit memo from the more menu.