An open credit is a credit memo or credit reference from a vendor that you can apply toward a future invoice payment. This is different from a credit tied to a return, though the process can be used for that purpose as well.
1. Start a New Open Credit
From the AP Invoices (AP Entry) screen, click the Open Credit quick action option.
Select the vendor (for example, GE Appliances).
Inventory Vendor Disclaimer
If the selected vendor is an inventory vendor, you'll see a disclaimer recommending that you complete the AP entry using PO Billing instead. This is because entering invoices outside of PO Billing for inventory vendors can cause your balance sheet numbers to not tie out to your reports.
If you're certain you want to proceed without PO Billing, confirm by selecting Yes, I'm sure.
2. Enter Credit Memo Details
Once past the disclaimer, fill in the credit memo details:
Credit memo date
Reference number
This field is labeled "reference number" rather than "credit memo number" because it may represent a credit memo or a more general credit reference.
If the reference number has already been used, the field will flag it. Add a hyphen or additional characters to make it unique — the field will turn green once accepted.
PO number (if applicable — this depends on how your billing and inventory are tied together).
Amount (for example, $400).
AP Trade Account (if general ledger is turned on) — select where the debit for this credit should be posted (for example, Accounts Payable).
3. Attach a Supporting Document (Optional but Recommended)
You can upload and attach a document to the credit memo. This is especially useful for future reference — for example, if you need to look back months later and understand exactly what a credit was for, since the reference number alone isn't always enough context.
4. Complete the General Ledger Posting
Go to the GL Posting section and click Add Posting.
Select the appropriate account for the posting.
Note: Since this is a credit, the entry will be a debit to Accounts Payable.
You may see a note indicating that this account is currently set up in your default postings — this is simply letting you know you're manually posting to that account instead of relying on automatic postings.
Continue adding postings until the remaining balance reaches zero and the entry balances.
5. Save the Credit Memo
Once the entry balances, click Save.
The credit memo will now be entered into the system. You can confirm this by sorting the grid by Entry Info to view the most recent entry — it will show the entry details (user, invoice date, vendor, and amount as a negative value, reflecting the credit).
What You Can Do With the Credit
Once entered, you can:
Send the credit to Accounts Receivable, or
Flag it in the AP Flagging screen to be applied against a future invoice.
Summary
Use Open Credit in the AP Invoices screen to enter a vendor credit that can be applied to a future invoice.
Be mindful of the inventory vendor / PO Billing disclaimer.
Fill in the credit memo date, reference number, amount, and AP trade account.
Optionally attach a supporting document for future reference.
Complete the general ledger posting so the entry balances, then save.
Once saved, the credit can be sent to AR or flagged for use against a future invoice.