Hi Liz. If the refund was given as check/cash, then the next step would be a positive AP invoice using the cash account you are depositing the check into in the grid. This will also handle recording the deposit, so no need for a separate GL deposit entry. The complete steps are in KB article 17416.

So you have a positive invoice that you want to apply this new credit against?  Set them both to pay in 4-3-1.  Go in to 4-3-2 and select the option for "Record payment made by".  choose manual check.  use "apply credit" as the check #  

Its not a credit for us, it’s a credit for the vendor.

I would actually like to get rid of the invoice with negative credit from a vendor by recording an electronic payment with a note BUT Sage doesn't let me add to the ‘Set to Pay’ list when the final balance is negative. Any recommendation so I can get rid of this invoice?