Which feature in QuickBooks Online allows a user to apply a refund to an existing or future bill?

The correct choice is vendor credit. This feature in QuickBooks Online is specifically designed to enable users to apply refunds from vendors against existing bills or future bills. When a business receives a refund from a vendor, it typically reflects as a vendor credit within QuickBooks. This credit can then be used to offset the amount due on any outstanding bills, enhancing cash flow management and ensuring accurate accounting.

Vendor credits streamline the process of managing vendor relationships and simplify record-keeping by allowing for direct application against pending payments. This functionality is important because it keeps the books in order by correctly matching expenses and refunds, ultimately reducing potential discrepancies in financial reporting.

In contrast, expense reimbursement generally refers to reimbursing employees for expenses they incur on behalf of the business, while bill credit is a term that does not exist as a standard QuickBooks feature. Service credit, on the other hand, would typically relate to credits for services provided and not directly applicable to refunds for bills. This clarification helps to understand why vendor credit is the preferred answer in managing vendor refunds effectively.