# How do vendor credits work?

> Create a credit from Finances → Vendor Credits, or straight from a purchase order's Credits tab. Open credits are pulled onto invoices as negative line items and flip to Applied automatically.

- Product: WorkSkedge
- Section: Purchase Orders & Vendors
- Canonical: https://workskedge.com/help/purchasing/create-and-apply-vendor-credits
- Updated: 2026-08-31T22:06:23.514766+00:00
- Source: VENDOR-CREDITS.md
- Keywords: vendor credit, supplier credit note, returned materials, credit on invoice, vendor credit statuses, apply vendor credit

## Steps

1. Go to Finances → Vendor Credits and click New Credit — or open a purchase order and use Create Credit on its Credits tab.
2. Select the vendor.
3. Link the project, work order or purchase order the credit relates to.
4. Add line items with description, quantity, unit price and unit of measure.
5. Add tax lines if the credit is taxable.
6. Save as Draft while you are still checking it, or Open when it is final.
7. Create or edit the customer invoice for that job and pick the credit up from the POs & Credits tab.
8. Save the invoice — the credit moves to Applied and shows as a negative line.

A vendor credit records money coming back from a supplier — returned materials, a billing correction, a damaged-goods allowance. Create one under **Finances → Vendor Credits**, or from a purchase order''s **Credits** tab so the vendor, job and line items are copied for you. Open credits then appear when you generate invoice lines and are applied as negative line items.

## Before you start

- The vendor must already exist; the vendor is the only mandatory field on a credit.
- If the credit relates to a specific job, link the project, work order or purchase order so it is pulled onto the right invoice.

## Create a standalone credit

Go to **Finances → Vendor Credits**, click **New Credit**, choose the vendor, optionally link a project, work order or purchase order, add line items (description, quantity, unit price, unit of measure), add tax lines if they apply, and save as **Draft** or **Open**.

## Create a credit from a purchase order

Open the PO, go to the **Credits** tab and click **Create Credit**. The form opens pre-populated with the vendor, project and work order from the PO, the PO''s line items and its tax lines. Adjust the quantities or amounts and save. Any credit linked to a PO shows up in that PO''s Credits tab.

## Status flow

```
Draft → Open → Applied → [Void]
```

| Status | Meaning |
| --- | --- |
| **Draft** | Work in progress, freely editable or deletable |
| **Open** | Finalised and awaiting application |
| **Applied** | Applied to an invoice as a negative line item |
| **Void** | Cancelled — no financial effect |

Valid moves are Draft → Open or Void, Open → Applied or Void, and Applied → Void.

## How credits reach an invoice

- Open credits appear in the **"POs & Credits"** tab of the Generate Invoice Lines dialog.
- Each credit becomes one line item with quantity 1 and a negative unit price, described as `{credit number} (Credit)`.
- Credits scoped to the same project or work order are pulled in automatically during invoice creation.
- On the PDF, negative amounts render in accounting format — for example `($500.00)`.

Status follows the invoice: saving an invoice that includes the credit moves it from Open to Applied, and voiding, deleting or editing the invoice to remove the credit returns it to Open.

## Notes and limits

- Credits apply in full — partial application is not supported.
- Only draft credits can be deleted; finalised ones are voided instead so the history is preserved.
- Credits can be filtered by vendor, project, work order, purchase order, status and sync status.

## Common errors

- **Credit not offered on the invoice** — it is still a Draft, or it is not linked to the project or work order the invoice covers. Set it to Open and check the links.
- **Credit reverted to Open** — the invoice that consumed it was voided, deleted or edited to remove the credit line.

## Screenshots

- New Vendor Credit screen with vendor, date, project, work order, purchase order, reference and line item fields: https://workskedge.com/api/public/help-image/app/v2/purchasing-new-credit.webp

## FAQ

### Can I apply part of a vendor credit?

No. Credits are applied in full — partial application is not supported in the current version.

### How does a credit show on the invoice?

As a single line item with quantity 1 and a negative unit price, described as the credit number followed by (Credit). Negative amounts print in accounting format, for example ($500.00).

### What happens if I void the invoice that used the credit?

The credit returns to Open so it can be applied to another invoice. The same happens if the invoice is deleted or the credit line is removed.

### Is it quicker to create a credit from the purchase order?

Usually yes. Starting from the PO's Credits tab copies the vendor, project, work order, line items and tax lines, so you only adjust the quantities.

### Can I delete a credit?

Only while it is a Draft. Finalised credits are voided instead, which cancels the financial effect while keeping the record.