Overview
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 with direct accounting provider connections (e.g., Quickbooks Online, Xero, NetSuite, or Sage) within Ramp at the moment.
Jump to:
- Creating a vendor credit
- Viewing vendor credits
-
Applying a vendor credit
- How Vendor Credits Sync in your accounting provider
- Frequently Asked Questions
Creating a vendor credit
Customers can create a credit memo for a particular vendor by using an existing paid bill in Bill Pay.
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 tab. Locate the desired vendor, open their profile, and click 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 a link 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. To view a particular vendor credit, navigate to the Vendor tab, locate the desired vendor, and scroll to the vendor credit section.
Please note: Vendor credits can also be shown on the Bills table by hovering over the amount as shown in the screenshot below.
Applying a vendor credit
If a vendor has available vendor credits, Ramp will provide the option to toggle application of the credit(s) on or off for a particular bill. Doing so will deduct the vendor credit amount from the invoice total. Please note that Ramp will apply the oldest credits first and that we only allow applying vendor credits that have synced successfully to your accounting provider (see Accounting section below for an example).
When applying vendor credits to bills, it is 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 an amount greater than or equal to the invoice total and the vendor is able to fully pay the bill.
For example, the vendor credit is $50, and 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: that once a vendor credit has been applied, it cannot be edited or deleted unless the bills it is connected to are deleted or have the vendor credit removed from them.
How vendor credits sync to your accounting provider
There are two accounting syncs to consider with vendor credits.
- Vendor credit creation
- Vendor credit application
Vendor credit creation
Ramp will automatically sync your vendor credits to your connected accounting software as soon as it is created. The synced vendor credit will be tied to the appropriate vendor and will pull over all the accounting coding information you inputted within Ramp. Any updates to the vendor credit within Ramp will also be reflected in your accounting provider. However, please note that changes to the vendor credit within the accounting provider will NOT be reflected in Ramp and might, in turn, result in accounting sync errors.
Any sync errors must be resolved in order to apply a vendor credit and you'll be notified of this on draft bills for the vendor:
Vendor credit application
If you do apply a vendor credit to a bill in Ramp, Ramp will also automatically apply the vendor credit to the bill created in your accounting provider. This action will happen only once the bill payment has been initiated. For example, if you receive a $100 bill and apply for a $25 vendor credit within Ramp, the bill will initially sync as $100; however, once the bill payment is initiated, the vendor credit will be applied, and the bill payment will sync to your accounting provider, updating the bill amount to $75.
Frequently Asked Questions (FAQs)
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
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 to future bills.
Which currencies are vendor credits supported in?
Vendor credits are currently only supported in USD.