Hi Guys,

Facing below problem, request help:

I use a logistics service provider to ship my stuff. Services are pre-paid (done through recharge). Tax invoices are issued at month end as per usage and deductions from wallet and tax paid is claimed as input. Until tax invoice is issued, recharge balance is reflected as vendor credits in my Zoho Books. Right now I am subscribed to a basic plan with higher freight rates (So far so good)

Now I decided to upgrade my account from basic to advanced (for reduced freight rates) at fees of basic 3000/- + 18% tax = 3540/- with commitment from vendor to refund back 3000/- as Cashback in my prepaid wallet account.

I got the bill of 3540/- and booked the same as expense. (3000/- as expense and rest 540/- as input credit of tax)

Now, how do I deal with this situation? I don't want to book 3000/- as expense (since in reality it is not an expense as I was aware of Cashback as it if giving me wrong picture on my P&L) and at the same time add 3000/- as vendor credit which can be used later for purchases.

I thought of manual journey as below:

credit - expense

debit - prepaid expenses (I record vendor advance in this account)

but problem in this is I am not able to allocate the credit to vendor account.

How to deal with this situation