Vendor Credits

For: People using the software to create and manage vendor credits (purchase returns or adjustments)

Purpose: Understand what the Vendor Credit module does and how it helps your business

What This Module Does

A vendor credit is a document that records credit you receive from a vendor, for example when you return goods or when the vendor adjusts a bill. The vendor credit has a total and an available balance (the amount still available to use). You can apply that balance to one or more bills to reduce what you owe the vendor. You can also record a refund from the vendor (money they pay back to you; your bank balance increases), which reduces the available balance and can be deleted to put the amount back on the vendor credit.

The Vendor Credit module lets you:

• Create and edit vendor credits (when the status allows).
• Create a vendor credit linked to a bill (bill reference only; you still choose vendor and branch) or standalone (vendor, branch, and shipping address).
• Apply the vendor credit to one or more bills (amount per bill); the bill balance and the vendor’s outstanding balance (what you owe) are reduced.
• Remove one bill from the applications (unapply that amount).
• Change status (e.g. Draft → Open, or Cancel); only allowed transitions are accepted.
• Refund: record the vendor paying you back (your bank balance increases; available balance on the vendor credit decreases).
• Delete a refund (reverse the refund; bank balance decreases, available balance on the vendor credit increases).
• Delete a vendor credit (only when status allows; reversals for applications and vendor balance are done first).

Main Features (What You Can Do)

1. Create a New Vendor Credit

When you create a vendor credit you typically enter:

• Vendor: the vendor (stored as a customer/vendor record) and branch the credit is for. The vendor must have the selected branch (the system adds it if missing).
• Bill (optional). You can link a bill by ID for reference; the system checks the bill exists. Vendor and branch still come from the fields you enter, not from the bill.
• Branch, division, and warehouse: where the vendor credit is raised.
• Shipping address: either your company’s main or additional address, or (if you link a customer for address) that customer’s main or additional shipping address. The system checks that the address belongs to the chosen source (company or customer).
• Items: products, quantities, rates, and amounts.
• Vendor credit date, reference, subject, notes, terms and conditions, and total amount.
• Attachments: you can upload files. These are stored securely and shown with the vendor credit.

What the system does when you save

• It generates a unique vendor credit number (e.g. VN-001).
• It records who created the vendor credit and when.
• It stores your company’s authorised signature and primary bank details (for display, if configured).
• It sets available balance to the vendor credit total (so you can later apply it to bills or record refunds).
• It reduces the vendor’s branch current balance by the total (so the amount you owe the vendor is reduced by that credit).

2. View and Search Vendor Credits

You can list vendor credits with:

• Date: a single vendor credit date or a date range (start date–end date).
• Branch and division: filter by one or more branches or divisions.
• Status: e.g. Draft, Open, Partially Used, Used, Closed, Cancelled.
• Vendor: filter by vendor.
• Search: by vendor credit number, reference, or vendor name (display name or company name). The list shows only vendor credits that match your filters and search.

The list is paginated. For each vendor credit you can see vendor, branch, division, warehouse, total, available balance, status, who added or last updated it, and items.

3. Open a Vendor Credit (Full Details)

When you open one vendor credit, the system shows:

• Header: vendor credit number, vendor, branch, division, warehouse, vendor credit date, status, total, available balance.
• Vendor: name, code, phone, company name, and address details.
• Items: each line with item name, quantity, rate, and amount.
• Shipping address: the address used for this vendor credit (company or customer address).
• Bank details: primary bank (if set for your company).
• Bills applied: list of bills to which this credit has been applied, with bill number and amount applied per bill.
• Refunds: list of refunds (refund amount, date, bank, reference, notes): money received back from the vendor.
• Attachments: list of attached files.

4. Edit a Vendor Credit

You can edit a vendor credit only when its status is Draft. Once the vendor credit is Open, Partially Used, Used, Closed, or Cancelled, the system does not allow editing.

When you edit a Draft vendor credit:

• You can change vendor, branch, division, warehouse, shipping address (company or customer source), items, total, and attachments.
• The system checks again that the vendor has the selected branch and that the shipping address belongs to the company or the chosen customer.
• Total cannot be set lower than the amount already applied to bills (if any). If you change the total, available balance is updated (total minus applied amount).
• The vendor’s branch current balance is adjusted: if the branch changes, the old branch balance is increased by the old total and the new branch balance is decreased by the new total; if only the total changes, the balance is adjusted by the difference.

5. Change Vendor Credit Status

You can change the status of a vendor credit only in allowed ways. The system uses rules such as:

• Draft → you can move to Open or Cancelled.
• Open → you can move to Closed or Cancelled.
• Partially Used → you can move to Closed (depending on configuration).
• Used, Closed, Cancelled → no further status change (or only certain transitions as per your setup).

When you cancel a vendor credit:

• The system reverses any amounts already applied to bills: each bill’s balance is increased back by the amount that had been applied, and the vendor’s branch current balance is increased by the vendor credit total (so the credit is taken back and you “owe” the vendor that amount again).
• The vendor credit status is set to Cancelled.

6. Apply Vendor Credit to Bills

For a vendor credit that is Open or Partially Used (not Draft, not Used, not Closed), you can apply part or all of its available balance to one or more bills.

• You choose the bills and the amount to apply to each bill.
• The system checks:
  • The vendor credit is not in Draft, Used, or Closed status and has available balance > 0.
  • Each bill exists and the amount applied does not exceed that bill’s balance amount.
  • The total amount you are applying does not exceed the vendor credit’s available balance.
• For each bill:
  • The bill’s balance is reduced by the amount applied (and bill payment status may move to Partially Paid or Paid).
  • The vendor’s branch current balance (what you owe) is reduced by the amount applied.
• The vendor credit’s available balance is reduced by the total applied. The vendor credit’s bills applied list is updated.
• If available balance becomes zero, the status is set to Used; otherwise it is set to Partially Used.

This lets you allocate the credit to the correct bills when settling with the vendor.

7. Remove One Bill from Vendor Credit Applications

For a vendor credit that has been applied to one or more bills, you can remove the application from one bill (by specifying the vendor credit, the bill, and the application record: e.g. documentId and billId).

• The system:
  • Increases that bill’s balance back by the amount that had been applied from this vendor credit.
  • Increases the vendor’s branch current balance (what you owe) by the same amount.
  • Increases the vendor credit’s available balance back by that amount.
  • Removes that bill from the vendor credit’s bills applied list.

The vendor credit status is updated: if available balance equals the total, status becomes Open; if available balance is between 0 and total, status becomes Partially Used; if available balance is zero, status becomes Used.

The credit is again available to apply to other bills or to record as a refund.

8. Refund (Vendor Pays You Back)

For a vendor credit with available balance > 0, you can record a refund: money the vendor pays back to you (e.g. into your bank).

• You enter refund amount, refund date, bank (optional), reference, and notes.
• The system checks:
  • Refund amount does not exceed the vendor credit’s available balance.
  • If a bank is selected, the bank exists.
• The system:
  • Increases the selected bank’s available balance by the refund amount (if bank is provided). The vendor has paid you.
  • Adds the refund to the vendor credit’s refunds list.
  • Reduces the vendor credit’s available balance by the refund amount.
  • Updates status: if available balance becomes zero, status is set to Used; if available balance is between 0 and total, status is set to Partially Used.

9. Delete a Refund

You can delete a specific refund from a vendor credit. The system:

• The system:
  • Decreases the bank’s available balance by the refund amount (if a bank was used). The refund is reversed.
  • Removes that refund from the vendor credit’s refunds list.
  • Increases the vendor credit’s available balance back by the refund amount.
  • Updates status: if available balance equals the vendor credit total, status is set to Open; otherwise Partially Used.

The amount is again available to apply to bills or to record as a refund again.

10. Delete a Vendor Credit

You can delete a vendor credit only when its status is Draft, Open, or Cancelled (not when Partially Used, Used, or Closed).

When you delete a vendor credit (and status is not Cancelled):

• For each bill in bills applied, the system removes this vendor credit from the bill’s credits applied list, increases the bill’s balance back by the amount that had been applied, and updates the bill’s payment status.
• The vendor’s branch current balance is increased by the vendor credit total (reverses the reduction done at create. You owe the vendor that amount again).
• The vendor credit record is then permanently removed.

If the vendor credit was already Cancelled, deletion only removes the record (no balance reversal).

Summary of Rules (Quick Reference)