If you pay your vendor bill (say $1000) and then receive a credit refund in the form of a check (say for $500), so that all balances are accurate after the transactions, you want vendor credits to affect the vendor balance and reflect on the 1099. However, this is not happening in Core.
In Core, credit received from a vendor in the form of a check does not affect the vendor balance (paid is still $1000 instead of $500). Even though the vendor gave you a credit, the 1099 picks up the initial total amount paid. So it does not affect their 1099 amount; you have to manually adjust that.
A workaround to handle this is by manually adjusting the payment to the vendor. Here is how you do this transaction in Core:
- Record the initial vendor bill (say $1000). It hits the A/P account and appropriate expense account.
- Then deposit the vendor check (refund $500) and use the relevant bank and expense account.
- When creating a vendor credit ($500), use the correct A/P account and bank account where you deposited the check.
- Record the actual bill payment for the vendor ($500), hitting the bank account and A/P.
- Run your 1099 report. It reflects the actual amount paid ($500).
At the end of your transactions, everything should balance.