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Old 05-23-2008, 12:42 PM
gracious gracious is offline
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Vendor Credit applied to customer invoice

We have a job which is invoiced for 3000.00. This is actually a claim where the customer isn't going to be paying us anything, this will all be credited to us by the vendor, ie. carpet replacement and labor reimbursement.

We ordered the replacement carpet and rec'd a credit memo which washed out that order however, the flooring dept. has this amount ($1500.00) subtracted from the invoice amount of $3000 and we have also rec'd another credit memo from the vendor for our labor which the flooring dept. has subtracted from the invoice as well ($1500) which once applied would zero out the invoice.

The problem is that the carpet bill is zero'd out by the credit memo and there is no way for me to also credit the invoice and I am not sure how to apply the labor credit memo from the vendor to the invoice.

So, how should the invoice have been set up in the first place? Should there even had been an invoice? How do I offset the cost of the carpet off of the invoice when it has already been credited on the bill? How do I enter the labor credit memo to the invoice

Thank you thank you thank you!!!!
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Old 05-24-2008, 05:03 AM
Joe Williams Joe Williams is online now
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Since you entered an invoice and a bill for the carpet replacement and labor reimbursement, treat them as a barter. Create a new Other Current Asset account anmed "Barter". Edit the bill-credits to use that account for the credited amount. Go to Receive Payments and select the invoice by clicking on the invoice numbr. Click Discounts and Credits and on the Discount tab the "Discount Amount" is the full amount of the invoice amount and the "Discount Account" is "Barter" (you will have to scroll up to locate it). Save and close. The Barter account should have a 0.00 balance and the invoice and bill should be "paid".
Joe Williams
Piedmont, Ok

Last edited by Joe Williams; 05-24-2008 at 05:09 AM.
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Old 05-27-2008, 01:48 PM
gracious gracious is offline
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Thank you Joe! I don't know what I would do without you!!!!

So how does the barter account get zero'd out? What am I suppose to post to get a balance in the barter account to have it wash out when I use the credit/discount? Also, this might change your approach, this credit is on our vendor account to be applied on other invoices, they will not issue us a check so how do I clear out that invoice and apply it when I pay bills? So confusing!

Last edited by gracious; 05-27-2008 at 02:05 PM.
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Old 05-27-2008, 02:24 PM
suzannemead suzannemead is offline
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Location: Woodbine, MD
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I usually set up the Barter account as a "bank" type account. This way I can use it right from the Pay Bills window where you choose what bank account to use.
Suzanne M. - "Better Books"
Certified Quickbooks ProAdvisor in Pro.,Prem. & Enterprise /
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Old 05-27-2008, 03:35 PM
gracious gracious is offline
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So I should change it to Bank type? How do I pay a bill and use this vendor credit and at the same time clear out that invoice that the credit is actually for?
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Old 05-27-2008, 06:17 PM
gracious gracious is offline
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Ok, I think that I have it sorted out, please look over and tell me if what I have done is correct.

First with regards to the initial invoice, what I did was to use my "sale" item for the replacement carpet $1500. and then on the next line using my "sale" item, showed as a description, the credit memo # and in the amount I did -$1500 to zero that out.

Then on the next line I used the "sale" item and in the description I wrote 'labor to install replacement carpet' and the amount of $1500, now my invoice is showing a balance due of $1500.00

Now, I went to customer "Receive Payments" and I created a new payment item called 'Credit Memo' and put the amount of $1500.00 and used 'credit memo' and used the credit memo number as a reference and instead of Undeposited funds, I switched it to my "Clearing Account" which is a bank type.

Now my clearing account has a balance of $1500.

Now I am going to be manually paying the vendor by check for the amount of $2655.00 and not Bill Pay. I was going to post the amount of each invoice being paid to their correct jobs using the Item side for job materials (which goes to COGS 'job materials'), total invoices add up to $4155.00 and then on the expense side I was going to choose "Clearing Account" for the account and do the -$1500 and show the description as Credit memo and number... and this would add up to the $2655.00 and should zero out the "Clearing Account" and also post the other invoices as COG to their jobs.

Does this sound correct? Will this work?

Thank you again for being so patient with me!!!
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