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What is a Vendor Credit?

Last updated on Nov 30, 2024

A vendor credit is a document that records credits received from suppliers for returned goods or pricing adjustments. It helps manage refunds and adjustments in Sevenledger

Vendor Credit Workflow

1. Creation

  • Navigate to Purchase > Vendor Credit tab in the sidebar

  • Click "Add Vendor Credit" button

  • Enter required vendor information and credit details

  • System generates a unique Debit Note number automatically

2. Basic Information Entry

  • Vendor Selection: Choose supplier from dropdown

  • Credit Date: Select when credit was issued

  • Reference Number: Optional field for external reference tracking

  • Terms & Conditions: Document any specific agreements

  • Notes: Space for additional relevant information

3. Item Details Entry

  • Item Selection: Choose products/services from inventory

  • Account Assignment: Select appropriate expense account

  • Quantity and Rate: Enter units and price per unit

  • Tax Configuration: Apply relevant tax rates

  • Amount Calculation: System automatically computes based on inputs

4. Financial Details

  • Subtotal: Automatic calculation of all items

  • Transaction Discount: Enter any overall credit adjustments

  • Discount Account: Select account for discount tracking

  • Total Amount: Final calculated credit value

Status Management

Available Statuses

  • Draft: Initial state for new credits

  • Open: Active credit ready for application

  • Void: Cancelled or invalid credits

Status Actions

  • Mark as Open: Activate credit for use

  • Apply to Bills: Link credit to specific vendor bills

  • Refund Processing: Convert credit to actual refund

  • Void Credit: Cancel active credits when needed

Advanced Features

Document Management

  • Clone Function: Create duplicate credits for similar transactions

  • Delete Option: Remove incorrect or unnecessary credits

  • Filtering System: Sort and find credits by date, vendor, or status

Credit Application

  • Bill Selection: Choose eligible bills for credit application

  • Amount Distribution: Allocate credit across multiple bills

  • Balance Tracking: Monitor remaining credit amounts

Troubleshooting Guide

Common Issues

  • Required Field Validation: Ensure all mandatory fields marked with asterisk

  • Format Verification: Check numerical entries for correct formatting

  • Connection Issues: Verify stable internet for saving transactions

Best Practices

  • Verify all credit details before saving

  • Document reasons for credits in notes section

  • Regularly reconcile applied credits with vendor statements

  • Maintain clear communication with vendors about credit status

Important Notes

  • Credits must be marked as Open before application

  • Refunds require appropriate payment account selection

  • Regular backup of credit documentation recommended

  • System automatically tracks credit balance and usage