Please keep in mind that we not accountants and we do not actually support QuickBooks Online but we can provide you with little tips and tricks to make it easier for you

This article covers on how to transfer a Customer Invoice over to be a Supplier's Credit Note instead

For Warranty Service Jobs, your Warranty Company may elect not to pay the Dealership direct for the warranty work completed

The Warranty Company may instead elected to transfer the Customer Invoice owing to the Dealership for Warranty work to be a Supplier's Credit Note instead

For example:

  • Dealership completed a Warranty Service Job for Smith & Co and the Invoice is currently sitting under the QuickBooks Customer account as owing
  • Smith & Co are also a Supplier / Vendor and they want to convert anything owing to the Dealership (for Warranty Jobs) to be deducted from what the Dealership owes them as a Supplier / Vendor

However - QuickBooks does not have the functionality to just press a button and the Customer Invoice is now a Suppliers Credit Note so we need to do a few steps for this process to work:

  1. Create a new Chart of Account as a Clearing account

In our example we have created a new liability chart of account called Warranty Clearing

If you already have a clearing account that you use on a regular basis, feel free to use it but just be aware that the QuickBooks may need the clearing account to be a certain account type ie Current Asset

  1. Pay the relevant Customer Invoice to that Clearing account:

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  1. Then create a Supplier Credit Note to the same Clearing Account:


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End Result:

  • The Customer Invoice has been 'paid' and is no longer sitting on the Customer Record in QB as outstanding
  • There is now a Suppliers Credit Note sitting on the Supplier's account
  • The Clearing account should be zero - this is a good way to check if you have done it correctly.  After you have done your entries, the Clearing account must return to zero balance