Vendor credits being split among invoices

QuickBooks Desktop and QuickBooks Online are entirely different platforms built on separate technologies, resulting in distinct workflows for tasks like applying credits.

Please note that the Automatically apply credits toggle in Account and Settings controls customer credits (Accounts Receivable side), not vendor credits (Accounts Payable side). When it comes to paying vendors or bills, QuickBooks has its own method for applying available credits. Sometimes, it doesn't follow the specific credits a user selects. Instead, it can proportionally draw from all open credits for that vendor to match the bill's total.

For example, suppose your company has a vendor, ABC Co., with the following open items:

• Bill #101: $600
• Vendor Credit #VC1: $300 (from a January return)
• Vendor Credit #VC2: $200.00 (from a February return)
• Vendor Credit #VC3: $150.00 (from a March return)
• Vendor Credit #VC4: $50.00 (from an April return)

Assuming you've already entered this data, follow these steps to see how it works:

1. Open the bill and click on Mark as paid.
2. In the Bill Payment screen, look down at the Outstanding Transactions and Credits sections.  
3. You'll see that the system uses portions of your available credits to zero out the total balance of your bill and automatically selects (ticks) those credits, applying them to the total bill.

You can also manage your vendor credit according to your preferences for future transactions.

Reply to this thread if you have any other questions.