Credit Entries (Vendor Credits)

What is this page about: This page explains how vendor credits work in Light: what a credit entry is, the states it moves through, how to create one, how to post it, and how to apply it against an open bill. It's written for anyone who works with accounts payable, whether you're new to the workflow or you're an accountant who wants the exact field names, states, and rules.

# On this page

• What a credit entry is
• Credit entry states
• Creating a credit entry
• Posting a credit entry
• Applying a credit to a bill
• Removing an applied credit
• Recording a vendor refund
• Archiving a credit entry
• Related articles

# What a credit entry is

A credit entry (also called a vendor credit or credit note) records money a vendor owes you back, for returned goods, a billing correction, or a refund. Once posted, you apply it against one or more open bills from the same vendor, so the bill balance goes down without a separate payment.

In Light, go to Spend management → Credit entries.

# Credit Entry States

A typical credit moves Posted → Partially cleared → Cleared as you apply it to bills. If your workspace requires approval, it moves Draft → Pending approval → Posted first, approval moves it straight to Posted, with no separate step to act on in between.

You may also see an Approved state briefly or in some filters. It's a real underlying status, but it's transient, the system passes through it and lands on Posted in the same step, so it's not a state you'll ever act on directly.

# Creating a Credit Entry

1. In Light, open Spend management → Credit entries.

2. Click + Create credit entry. This immediately creates the entry in Draft and opens it, there's no header to fill in first and no separate save step.

3. Fill in the header. The fields are:

   • Vendor
   • Entity
   • Effective date
   • Currency
   • Credit amount
   • Number
   • Description (optional)

4. Add one or more line items. Each line needs a description, an amount, a GL account, a cost center, and a tax code.

Header and line fields auto-save as you edit them (briefly debounced), there's nothing further to click to save your changes.

# Posting a Credit Entry

Open the credit and click Post in the header.

If your workspace has a credit approval workflow set up (Settings → Workflows), the button reads Submit for approval instead. The credit sits in Pending approval until a reviewer approves it, then it moves to Posted automatically.

A credit only becomes available to apply against bills once it's Posted.

# Applying a Credit to a Bill

1. Open a Posted credit entry.
2. Find the Apply credit to bills table. It lists open bills for the same vendor and entity, in the same currency, along with each bill's Original amount.
3. Tick the bill you want to apply the credit to. This opens a dialog where you enter the application amount.
4. Confirm.

The credit's remaining balance (the credit amount minus what's already applied) updates as you go. You can apply one credit across several bills, one at a time. Once the full amount is applied, the credit's state changes to Cleared.

# Removing an Applied Credit

Open the credit's detail view and untick the checkbox next to the bill you want to remove. This unwinds that application and adds the amount back to the credit's remaining balance.

# Recording a Vendor Refund

If a vendor pays you back in cash instead of you applying the credit to a bill, click Enter payment from the credit's detail header. This is available while the credit is Posted or Partially cleared. Choose the payment date and the account the refund is coming from, which can be a bank account or a ledger account, then enter the amount.

# Archiving a Credit Entry

Click Archive from the credit's detail header. This is only available for credits in Draft or Posted, once any amount has been applied to a bill, the credit moves to Partially cleared and the Archive option no longer appears there. Applying a credit removes the Archive option automatically, so a credit with active bill applications is never left needing one.

# Related Articles

• Entering bills
• Scheduling and Releasing Payments

Also searched as: Vendor credit, credit note, credit memo, AP credit, apply a credit to a bill, vendor refund, credit approval workflow.