Account for monies paid by a vendor on a negative balance

If a vendor has a negative balance and sends you a refund (like a check or a credit card credit), you can do the following:

• Record the payment through Other receipts in Cash Management.
• Adjust the vendor balance to zero by creating a credit memo for the amount.
• Apply the credit memo to open transactions.

Unless you apply the credit memo, the transactions and the adjustment continue to appear on your aging report.