# Introduction - Vendor Credits

A vendor credit is money a supplier owes you back, usually after a short, faulty or over-charged delivery.

**Video coming soon:** Turning a receive discrepancy into a credit, and setting it against the next bill.

It is the correcting document on the purchase side, and it is the natural end of a mismatch the receive caught. The bill said one thing, the delivery said another, and this is how the difference gets recorded rather than argued about by email.

![The Vendor Credits screen listing credits raised against UK suppliers, with columns for the credit date, credit number, vendor, the bill it corrects, its status and its amount in pounds.](https://www.sorviai.com/help/inventory/vendor-credits/vendor-credits-list.png)

*Each credit names the bill it corrects, which is what makes the pair readable a year later.*

## What usually causes one

| What happened | Why a vendor credit |
| --- | --- |
| You were billed for more than arrived | The receive is the evidence. The credit is the correction |
| Goods arrived faulty and you are keeping them | Nothing is going back; the price should come down |
| The bill used the wrong price | The goods were right, the amount was not |
| You returned goods to the supplier | The credit follows the goods out |

> **Note:**
>
> **A credit is not a stock movement**
>
> Being credited for goods that never arrived does not change your count, because they were never received in the first place. If the goods DID arrive and are going back, that is a stock movement as well, and the credit is only its money half.

## Applied or refunded

![A vendor credit record showing its number and status, the supplier, the bill it was raised against, the credited lines and the total, alongside an activity panel.](https://www.sorviai.com/help/inventory/vendor-credits/vendor-credit-detail.png)

*A credit is a balance in your favour until it is applied to a bill or refunded.*

- **Applied** (the common case): Set against another of that supplier's bills, reducing what you pay next. It needs an open bill to apply to.
- **Refunded** (real money back): The supplier pays you. Worth insisting on when the trading relationship is ending, and rarely worth chasing otherwise.

> **Tip:**
>
> **Raise it while the delivery is fresh**
>
> The receive that proves the shortfall has a date on it, and the conversation is far easier the same week. A credit chased at year end is one the supplier has forgotten the delivery for.