If you have a situation where you have purchased materials for a job, but then you need to return them, here's how to handle that in Smart Contractor.

When you return materials to the vendor from which you purchased them, this is effectively a "reverse purchase", or a vendor credit. Vendor credits are the same as purchases, but in reverse. As such, you enter vendor credits the same way you enter purchases: in the Enter Purchase menu option.

There are three different situations in which you might return a vendor purchase. Here is how to handle each situation:

• If you have not entered the purchase (for the returned material) in Smart Contractor, then there is nothing you need to do in Smart Contractor.
• If you have entered the purchase for the returned material, you need to enter a Vendor Credit (reverse purchase) in Smart Contractor. To do that:                                    

  - Go to the Enter Purchase menu option.

  - Click on the prompt for Purchase; select (Add New); find the returned item in the list. If the item is not in the list, that is because you checked the "Purchase Complete" box in the original purchase entry. If that is the case, open the original purchase entry, locate the item, and uncheck the "Purchase Complete" box for that item, and then click OK to save the change. Then select (Add New), and find the returned item in the list.

  - Click in the box in the left column; enter the quantity returned with a minus sign; check the "Billable" box (in order to issue a Credit Memo to the customer), and check the "Vendor Credit" box above. This will create a Vendor Credit (a negative purchase). Click OK to save. This will create a vendor credit in QuickBooks.

• If you have already invoiced the customer for the returned materials, enter a vendor credit for the purchase (as above), and also enter a credit memo (negative invoice) to credit the customer's account in Smart Contractor. To do that:                                                      

  1) Enter a negative purchase (vendor credit) for the returned materials, as described above. NOTE: Make sure you check "Billable" on each item returned in the vendor credit entry! Credit items that are not marked as "Billable" will not appear in the list of items in the Create Invoice (Credit Memo) menu option.

  2) Create a Credit Memo to credit the customer for the returned materials:

  - Go to the Create Invoices menu option.
  - Click on the prompt for Invoice; click (Add New).
  - Click on "Credit" check box.
  - Click on "Invoice Options..."
  - Click on option to Invoice: "Actual Cost". This will retrieve the negative purchase items (vendor credits) in the list of items to credit.
  - Check the box of the (negative) items to credit.
  - Click OK to save, or View to view or print the Credit Memo.
  

Note: Smart Contractor does not allow you to apply vendor credits to vendor bills. Since Smart Contractor uses QuickBooks to manage accounts payable, QuickBooks is used to track vendor credits and apply them to vendor bills. So, if you are using QuickBooks, you can enter vendor credits in Smart Contractor, and then apply them to bills (vendor invoices) in QuickBooks.