Learn how to handle bills to be paid later and bills to be paid immediately using bills, checks, or expenses. You can find these in the + New menu in your QuickBooks Online account.
When to enter bills
- Enter bills from vendors to accurately report your Accounts Payable, especially if you run your reports on an accrual basis.
- If tracking Vendor balances, entering bills is essential for knowing how much you owe your vendors.
- Record a bill for any services or items received that you will pay for later - whether or not there is an actual bill received from the vendor.
For example, when you receive your electric bill, which is not due until the end of the month, useBill to track what you owe. Then, usePay bills to clear the bill and generate the check.
Learn how toenter bills to keep track of your payables.
When to enter bill payments
- If you originally recorded a bill in QuickBooks, use Pay bills to close the bill. You can print a bill payment check or pay via credit card.
- Entering a bill payment through Pay bills ensures that the Vendor balance decreases appropriately.
- Using Check or Expense may cause the bill to still show unpaid on your reports.
- If you paid a bill via electronic payment, enter EFT in the Check no. field.
Learn how to record a bill payment check or pay a bill using credit or debit card.
When to record checks or expenses
- Both Check and Expense report a transaction as an expense and a payment simultaneously.
- While Bills are for payables (received services or items to be paid later) Check and Expenses are for services or items paid on the spot.
- If you need to print a check, record an expense as a Check, instead of an Expense.
- If you paid something via credit card, use Expense.
- If you paid something via EFT, you should still use Check or Expense. You can enter EFT in the Check no. field.
As an example, if you bought supplies at Office Depot and immediately paid for them, record the transaction usingCheck orExpense. You can skip entering and paying bills, because there's no money owed to Office Depot.
Get help with entering a Check or Expense.
Note: If your preferred delivery method for a customer is set to 'Print later', the Expense will save as a Check.
To check this, go to your customer's profile, then select Edit. Go to the Payments section and verify that the preferred delivery method is not set to Print later.
FAQs
Both Cheque and Expense report a transaction as an expense and a payment simultaneously. While Bills are for payables (received services or items to be paid later) Cheque and Expenses are for services or items paid on the spot. If you need to print a cheque, record an expense as a Cheque, instead of an Expense.
What is the difference between expenses and items in QuickBooks? ›
Expense tab entries are direct posting to the Chart of accounts. Think of Items as More Meaningful to your Business activities. The Items List describes what your business makes, does, sells, buys, or buys and sells. Items control the flow of the data to accounts.
What is the difference between a bill and an invoice in QuickBooks? ›
Intuit QuickBooks classifies bills and invoices in very distinct ways. According to this accounting software giant, an invoice includes the money your customers owe you, while a bill refers to the money you owe your creditors. In other words, an invoice and a bill are classified as income and expenses, respectively.
What is the difference between bills and expenses in personal finance? ›
▶ Bills- Recurring, they happen regularly and are predictable. Example rent. ▶ Expenses- Aren't bills but you spend money on them. Example groceries.
What is the difference between bills and Expenses in a budget? ›
Also, Bills are usually item based so you enter stock via bills. Expenses are more generic, like phone bills are not even entered as items but as categories that are preset.
What is an example of Expenses? ›
What Are Examples of Expenses? Examples of expenses include rent, utilities, wages, salaries, maintenance, depreciation, insurance, and the cost of goods sold. Expenses are usually recurring payments needed to operate a business.
Is rent a bill or expense? ›
In general, rent or mortgage payments come under the category of operating expenses. This is because they are necessary costs of doing business and are not directly related to the production of goods or services. Other examples of operating expenses include office supplies, utilities, and insurance.
What are considered expenses in QuickBooks? ›
Expenses (Definition)
These costs include products and services purchased to produce the business product or service as well as the general day to day utilities, rent, legal costs, employee wages and salaries, contractors, marketing and advertising, and freight costs etc.
How do I change an expense to a bill in QuickBooks Online? ›
The process begins by logging into your QuickBooks Online account and navigating to the 'Expenses' tab. From there, locate the specific expense that needs to be converted to a bill, and click on it to access the details. Next, select the 'More' option, followed by 'Add to Bill'.
How do bills work in QuickBooks Online? ›
After you get a bill from a vendor, here's how to record it:
- Select + New.
- Select Bill.
- From the Vendor ▼ dropdown, select a vendor.
- From the Terms ▼ dropdown, select the bill's terms. ...
- Enter the Bill date, Due date, and Bill no. ...
- Enter the bill details in the Category details section. ...
- Enter the Amount and tax.
An invoice and a bill are documents that convey the same information about the amount owing for the sale of products or services, but the term invoice is generally used by a business looking to collect money from its clients, whereas the term bill is used by the customer to refer to payments they owe suppliers for ...
Why are invoices called bills? ›
Different terms for the same document
An invoice contains information about how much money a customer owes. This document is considered an invoice by the business that has provided the goods or services to the customer. The customer who receives this invoice then records this document as a bill that needs to be paid.
What is the meaning of bills and expenses? ›
In other words, Bills: let you track money you owe that doesn't need to be paid right away. Expense: Record an expense if you don't have a bill or if you wouldn't want to track the payments that you make for that bill. For example, a bill you receive for dining out with your customer.
Are bills an expense? ›
Both expenses and bills are used to record an expense amount but in different scenarios. You record a bill when your vendor or supplier sends an invoice for the purchase you made. You use bills to keep track of the money you owe your vendors or suppliers.
Is a credit card payment an expense in QuickBooks? ›
A credit card payment is treated as a liability payment in QuickBooks, as it reduces your credit card balance. Note that QuickBooks doesn't count credit card balance payments as a direct business expense, but rather as the repayment of borrowed funds.
What is the difference between create bill and create expense in QuickBooks Online? ›
If you plan to pay for the expense in the future, enter it as a bill. You can record bills one at a time, or record multiple bills for multiple suppliers at once. On the other hand, if you've already paid for a business expense, enter it as an expense.
Should I write checks or enter bills in QuickBooks? ›
In a nutshell, only use the "Enter Bills" feature for bills that you will not be paying in full all at once or if you need to track purchase orders, and then write check for bills that you are paying in full.
How to change a bill payment to an expense in QuickBooks Online? ›
To create an expense:
- Click the + New button.
- Select Expense.
- In the Payee field, choose a vendor. ...
- Select the Payment account to which to credit this expense.
- Enter the date of the purchase in the Payment date field and specify the Payment method for the expense.
- Type in the amount of the purchase and any Tax paid.
