Hello there, @NRomyn.
I want to ensure that you'll be able to apply credit to your vendor successfully. Let's get this sorted out.
You have mentioned that you created a credit memo from a vendor. That said, the option to link these two transactions together is not possible because credit memo is only for a customer not vendor. To sort this out, we'll need to delete the credit memo instead make a vendor credit. You need to make a deposit and categorize it under the Accounts Payable account. This way, you'll be able to link the deposit to the vendor's credit.
Here's how:
- From the Banking menu, select Make Deposit.
- Select the name of the vendor, choose Accounts Payable, enter a memo, and enter the amount, as shown below.
- Click Save & Close.
After that, link the deposit to the credit to zero out the remaining balance. Here's how to do so:
- Hit on Vendors at the top menu bar.
- Click on Pay Bills.
- Select the deposit that matches the vendor check amount.
- Press on Set Credits and apply the Bill Credit you created earlier then press Done.
- Tick Pay Selected Bills.
- Hit Done.
In addition to the steps above, I'm adding this link for a guide: Recording refunds you received from a vendor.
Feel free to browse these articles to help you manage the receivables and parables of your business:
If there's anything else that I can help you with, please don't hesitate to insert a comment below. Stay safe and healthy.
