What are "Vendor Credits" used for in QuickBooks Online?

Vendor Credits in QuickBooks Online are specifically used to record refunds or credits received from vendors. These transactions might occur when a business returns items to a vendor, is overcharged for a purchase, or receives a discount or rebate. Recording a vendor credit allows the business to keep accurate financial records and ensures that the accounts payable balance reflects the actual amount owed to the vendor after accounting for any credits received.

In this context, when a vendor credit is applied, it reduces the total amount payable to the vendor, which is essential for maintaining accurate financial records and cash flow management. This functionality helps businesses avoid overpayments and streamline their reconciliation processes.

The other options do not accurately describe the purpose of vendor credits. For instance, issuing new invoices pertains to sales transactions and accounts receivable, while adjusting payroll calculations relates to employee compensation and is managed through payroll features. Requesting additional funds from vendors is not a function of vendor credits, as vendor credits deal with adjustments to amounts owed rather than requests for more money.