Vendor Credits

When a vendor owes you money — returned goods, billing error, negotiated allowance — record it as a credit and apply it against future bills instead of waiting on a refund check.

Recording a Credit

A vendor credit captures dollars the vendor owes you. Typical triggers:

• You returned goods
• The vendor overcharged on a bill
• An allowance or pricing adjustment was negotiated
• Goods arrived damaged and a credit was issued
• A service didn't deliver as promised

To create one:

1. Open Vendors from the sidebar
2. Select the vendor
3. Click New Credit Note (or go to Vendor Credits and click Create Credit)
4. Set the credit date — typically the date the vendor issued the credit
5. Add a reference number if the vendor gave one (their credit memo number)
6. Add line items describing what's being credited:
   • Description — what was returned or adjusted
   • Account — the expense or asset account to credit (this reverses the original charge)
   • Amount — the credit amount for this line
7. Add any notes for your own records
8. Click Save Credit

The Journal Entry

When you apply the credit to a bill, Kantivo posts the matching journal entry for the amount applied:

Net effect: as the credit is applied, your AP balance for that vendor drops and the original expense or asset hit reverses by the same amount. Pick the offsetting account when you create the credit — it's the account this entry credits.

Applying to Bills

Once a credit exists, apply it against outstanding bills from the same vendor to reduce what you pay them.

1. Open the credit
2. Click Apply to Bill
3. Pick the outstanding bill(s) from the list
4. Enter how much to apply per bill:
   • Full credit to one bill
   • Split across multiple bills
   • Partial — keep the rest as an open credit
5. Click Apply

When applied:

• The bill's balance due drops by the applied amount
• If the credit fully covers the bill → status flips to Paid
• Partial coverage → remaining balance stays outstanding
• The credit's available balance decreases by the applied amount

Example

$500 credit, two outstanding bills:

When the Vendor Sends the Money Back

Not every credit gets used against a future bill. Sometimes the vendor simply refunds you — and a refunded credit that stays open is money counted twice: once sitting in your bank, once still showing as credit available to offset purchases.

Record it against the credit:

1. Open the vendor credit
2. Record Refund
3. Enter what came back and the date it arrived
4. Pick the account it was deposited to — wherever the money actually landed
5. Say how it came back — cash, credit card refund, cheque, EFT, ACH, wire, PayPal or other
6. Add a reference (their cheque number, a transaction id) if you want the trail
7. Record it

Method and destination are two different questions and both count. Money refunded onto the card you paid with belongs against the card account, not a bank account — it reduces what you owe on the card rather than inventing cash that never arrived.

What posts

Same offset an applied credit hits. The two events relieve the identical thing and differ only in the other side of the entry — cash when it is refunded, payables when it is applied to a bill.

Partial refunds

A vendor can send back part of a credit and leave the rest on account. Record what arrived; the credit stays Open with the balance still usable. Refund the lot and it closes as Refunded.

Refunds draw only on the open portion. Anything already applied to a bill is spent — that money settled an invoice you no longer owe — so Kantivo blocks a refund larger than the remaining balance.

Tax You Already Claimed Back

Recovered the tax on the original purchase? Sending the goods back has to undo that claim as well, or you are still recovering tax on stock that is no longer yours.

Set a Sales Tax Code on the credit — whatever the bill carried. The figure you type is pre-tax; Kantivo adds the tax and totals it for you.

Whenever the credit is relieved — applied to a bill, or refunded — the tax comes off with it:

Recoverable components are the ones that reverse against your ITC. Non-recoverable tax like PST hit expense when you bought the goods rather than being claimed, so it unwinds through the offset account instead — the two are not interchangeable and Kantivo keeps them apart.

Relieve part of a credit and a matching share of the tax unwinds with it. Half a taxable credit refunded reverses half the ITC; the balance waits for the rest.

Goods Physically Going Back

A vendor credit can name what is being returned instead of carrying a bare figure. Tick Goods are going back to the vendor and add a line per item. Stock leaves your shelf when the credit is created — that is the moment the goods actually go, not whenever you later put the credit against a bill.

Lines set the credit's value when they exist, so nothing sits beside them able to contradict them. Delete the credit and the stock returns.

Open Credits List

To find all credits that haven't been fully applied:

1. Open Vendor Credits from the sidebar (also accessible from the Vendors section)
2. The list shows every credit note and its current status
3. Filter by status to see only open credits
4. Filter by vendor to focus on one supplier

Each row shows:

• Credit number and date
• Vendor
• Original amount — total when the credit was created
• Applied — how much has been used against bills
• Available — unapplied balance remaining
• Status — Open or Applied

Status

Credits live in one of two states:

Credits start Open and flip to Applied once the entire amount has been used against bills, or to Refunded when the vendor sends the money back instead.

Deleting Credits

To remove a credit that was entered incorrectly:

1. Open the credit from the Vendor Credits list
2. Click Delete
3. Confirm

If the credit has been applied to bills, Kantivo first reverses those applications (so the affected bills return to their previous outstanding balance), then removes the credit itself. The original journal entry is voided and the audit log records the deletion with your user name and timestamp.