Vendor Credits are credits that you receive from your vendor as an equivalent of the amount that they owe you. With vendor credits, you can track this amount until it is paid by the vendor, refunded, or applied to other bills of the vendor.
Customers can easily track these vendor credits within Ramp and seamlessly apply them to their bills within Bill Pay.
Please note that vendor credit functionality is only available to customers that have Quickbooks Online and Xero connected to Ramp at the moment. This functionality is expected for NetSuite and Sage customers by the end of October 2023.
- Creating a vendor credit
- Viewing vendor credits
Applying a vendor credit
- Frequently Asked Questions
Creating a vendor credit
Customers can create a credit memo for a particular vendor via an existing paid bill in Bill Pay OR from the vendor's profile in Vendor Management
From a paid bill
If a credit memo is issued on a particular bill that has been paid, you can locate that bill within the Paid tab and begin to create a vendor credit from the three dots menu.
After clicking “New Vendor Credit”, a vendor credit form will appear where you can input relevant credit memo information. When creating a vendor credit from an existing paid bill, Ramp will automatically tie the credit to the vendor and the bill the credit was created from. Additionally, Ramp will also pull the line item coding from the linked bill and apply it to the vendor credit. If there are any vendor credit memo attachments, you may optionally upload them to the draft vendor credit.
Once all the vendor credit information has been entered, simply click “Save Vendor Credit” to create the vendor credit. All vendor credits are stored and easily accessible from the vendor’s profile.
From the vendor profile
You can also create a vendor credit directly from the vendor’s profile in the Vendor Management tab. Begin by locating the desired vendor, opening their vendor profile, and clicking the “New Vendor Credit” button.
From there, you will once again have the opportunity to input all the relevant vendor credit information such as line item amounts, descriptions, and codings as well as linking to a reference bill, if desired. If you do link a reference bill, please note that only the paid bills connected to the selected vendor will appear in the dropdown.
Note to create a vendor credit, a vendor name and line item(s) are required. A reference bill or credit memo documents are NOT required fields.
Viewing vendor credits
All vendor credits are stored on the vendor profile they are associated with. If you would like to view a particular vendor credit, navigate to the Vendor Management tab, locate the desired vendor, and scroll to the vendor credit section.
Applying a vendor credit
If a vendor has available vendor credits, Ramp will automatically apply the available vendor credit balance to your next bill for the vendor and deduct the vendor credit amount from the invoice total. Please note, Ramp will apply the oldest credits first.
When applying vendor credits to bills, it useful to think of them in two scenarios:
Vendor credit(s) partially pays for the bill
This is the case when the vendor credit(s) totals to an amount less than the invoice total and is able to partially pay for the bill.
For example, the vendor credit is $50, the invoice total is $150, therefore the payment total is $100 since the vendor credit brings the total down by $50 and is fully used up.
Vendor credit(s) fully pays for the bill
This is the case when the vendor credit(s) totals to an amount greater than or equal to the invoice total and is able to fully pay for the bill.
For example, the vendor credit is $50, the invoice total is $25, therefore the payment total is $0 as the vendor credit could cover the full payment amount (and there is still a balance of $25 left on the credit)
Bills where the vendor credit fully pays for the bill do not require a payment method. Additionally, once all approvals are received, the bill will automatically be marked as paid and will be moved to the “Paid” tab in Ramp.
Please note, once a vendor credit has been applied, the vendor credit cannot be edited or deleted unless the bills it is connected to are deleted or have the vendor credit removed from them.
Frequently Asked Questions
Will Vendors get notified about applied vendor credits?
- Yes, if a vendor credit has been applied to a bill, then the standard email communications to vendors will be updated to include information that a credit was applied.
Can you create vendor credits / link vendor credits to unpaid bills
- Unfortunately that is not possible at this time.
What happens to a vendor credit once fully applied?
- Ramp will automatically remove the vendor credit and it will not be available to be applied for future bills
Which currencies are vendor credits supported in?
- Vendor Credits are currently only supported in USD