A vendor has an open credit. Instead of applying it to the next invoice, the vendor has sent a check. How do I apply this payment and then clear the credit?

A vendor has an open credit. Instead of applying it to the next invoice, the vendor has sent a check. How do I apply this payment and then clear the credit?
If vendor sent in monies without reference to a liability and if there is no open invoice to be applied against, a)either return the check- b)deposit check and show liability to vendor, c)if open balalnces, apply check against oldest balance and send vendor statement showing disposition of his funds in any of the above scenarios.