How to cancel vendor bill after making payment

Step 1: Go to Accounting -> Vendors-> Bills-> Select vendor bill which has paid status

Step 2: Click on [i] icon as the picture below and click on Unreconcile to remove the payment from this vendor bill

Step 3: Click on the Cancel button on the toolbar. After you cancel this vendor bill, inventory quantity and journal entries will be removed

You can still use this vendor bill if you only want to change something in the vendor bill (Example: Vendor reference, bill date,..). You just click on Set to draft and the inventory valuation, journal entries will be posted after you click on the Validate button. Select Add to reconcile the payment with vendor bill