When suggesting vendor payments, credit memos appear as refunds. The refund option is available as there may be a time when a vendor is not going to have any additional invoices to apply a credit against, or the vendor has requested payment for the credit. However, a refund cannot be processed with other payments. You will be able to issue a check, but the system will not allow you to post that transaction. If this has happened, you will need to void the checks, make the appropriate changes, and re-process the payment.
Solution #1: If you have already suggested vendor payments, and you do have refunds showing in your payment journal, but have not processed the checks, you can go down the list and change the refund to credit memo. Alternatively, you can clear your payments journal and proceed to Solution #2.
Solution #2: When you suggest vendor payments, uncheck the box that says ‘New Document No. per Line’, and then all credit memos will appear as credit memos, then you can proceed to process and post as normal.