How to add menu items to vendor dashboard?

In order to add menu items to vendor dashboard first you need to create a magento custom extension then put this xml code to config.xml of your extension.

<?xml version="1.0"?>
<config>
    <!-- Some code here -->
    <vendors>
        <menu>
            <credit module="vendorscredit">
                <title>Credit</title>
                <frontend_class>credit</frontend_class>
                <sort_order>40</sort_order>
                <children>
                    <withdraw>
                        <title>Withdraw Funds</title>
                        <sort_order>10</sort_order>
                        <action>vendors/credit_withdraw/</action>
                    </withdraw>
                    <withdrawal_history>
                        <title>Withdrawal History</title>
                        <sort_order>20</sort_order>
                        <action>vendors/credit_withdraw/history</action>
                    </withdrawal_history>
                </children>
            </credit>
            <sales>
                <children>
                    <transaction>
                        <title>Transactions</title>
                        <sort_order>50</sort_order>
                        <action>vendors/credit_transaction/</action>
                    </transaction>
                </children>
            </sales>
        </menu>
    </vendors>
    <!-- Some code here -->
</config>