QuickBooks allows you to record transactions that you need to pay at a future date, including expenses incurred, materials purchased, or services provided by a vendor. This is how you can keep track of all your accounts payables and know what or when a bill needs to be paid.

A bill is generally a document or invoice received from a supplier or vendor that requests payment for goods or services provided. When a company purchases goods or services on credit, the supplier will typically issue a bill detailing the items or services provided, the quantity, unit price, total Amount due, payment terms, and any applicable taxes or discounts.

Recording bills in QuickBooks is important, especially if goods are delivered or services are rendered. It ensures that expenses are properly tracked, accounts payable balances are up-to-date, and financial reports are accurate. This process also allows businesses to stay on top of the payments and avoid missing due dates, which can help to maintain positive vendor or supplier relationships.

What is a bill in QuickBooks?

In QuickBooks Desktop, A bill is money that your business owes when you purchase and receive a product or service but will pay later. If you receive a product or service but plan to pay for it later, it’s considered a bill. You won’t see the money leave your business account until the payment is made.

What is the purpose of entering a bill for received items in QuickBooks?

Entering bills in QuickBooks Desktop is essential for maintaining accurate financial records, managing cash flow, and ensuring timely payments.

Here are the key reasons why you need to enter bills:

• Accurate Accounts Payable Tracking:

Entering bills allows you to keep track of what you owe to vendors and when payments are due. This makes it easier to manage upcoming payments and avoid missing payments, which can damage vendor relationships or lead to late fees. 

• Improved Cash Flow Management:

You can monitor upcoming expenses and manage your cash flow effectively, ensuring you have sufficient funds available to cover upcoming expenses, preventing cash flow shortages.

• Accrual-Based Accounting:

If you follow the accrual accounting method, entering bills ensures that your finances reflect the true state of your business when expenses are recorded and incurred, not when paid. This provides more accurate profit and loss reporting, as expenses are matched to the time period in which they occur.

• Inventory Valuation:

Bills help in updating the value of your inventory on hand. QuickBooks uses this information to calculate the total value of your inventory, which is essential for financial reporting and analysis.

• Efficient Financial Reporting:

Entering bills updates your financial reports such as the balance sheet, and profit & loss statement, giving you accurate information about your business’s liabilities and expenses. Accurate reports help you to make better business decisions and provide reliable information for tax preparation, lenders, or investors.

• Reconciliation:

Entering bills makes the reconciliation of your bank accounts easier, as you can match your bills to payments and inventory received. It also helps to maintain accurate financial records, manage expenses, and ensure compliance with accounting standards.

• Make Bill Payments with Pay Bills:

Once bills are entered, you can use the Pay Bills feature to organize payments, apply vendor credits and manage payments. It streamlines the payment process and ensures payments are recorded against the correct transactions.

• Tax Compliance:

Properly recording inventory purchases ensure that you report accurate expenses for tax purposes, which can minimize tax liabilities and avoid potential issues associated with tax authorities.

• Avoid Duplicate or Missed Payments:

Entering bills also helps you avoid accidental duplicate payments, reducing the risk of paying a vendor twice or forgetting to pay a bill. You can keep track of what has been paid and what hasn’t. It minimizes errors in payments and keeps your vendor accounts organized and reconciled.

• Better Vendor Management:

Entering bills helps you to keep track of which vendors you owe money to, and you can easily access vendor reports to see payment history and outstanding bills. This manages your relationships with vendors which offer better terms, discounts, or priority service. 

Things to Remember Before Entering Bills in QuickBooks Desktop

Before entering bills in QuickBooks Desktop, it’s important to keep certain things in your mind to ensure accuracy and streamline the process.

Below we’ve listed what exactly you need to do:

• Make sure the vendor details are correct and up-to-date in QuickBooks, including name, address, and payment terms.  
• Check that the bill reflects the correct charges, quantities, taxes, and terms before recording it.
• Assign the bill to the appropriate expense account (e.g., utilities, office supplies) or item account to ensure proper tracking.
• Review your Chart of Accounts to make sure you are selecting the right category for accurate financial reporting.
• Enter the correct payment terms, such as Net 30, Net 60, etc., so QuickBooks can calculate the due date and help you manage your cash flow.
• Use the invoice or bill number to search for the bill before entering it to ensure it hasn’t been entered already.
• Ensure the bill date and due date are accurate, as both are essential for better financial reporting and payment scheduling.
• Verify that the tax is correctly calculated and categorized for accurate reporting if the bill includes sales tax.
• Attach scanned copies of the original vendor bill or related documents for easier future reference.
• Regularly review the Accounts Payable (A/P) balance to be sure you’re on track with payments and avoid late fees or missed payments.

Steps to Enter Bills for Received Items in QuickBooks Desktop

You can receive inventory with or without a bill once you record a purchase order. Recording the inventory received and the corresponding Bill, if given, updates the quantity on hand for each item and the payable to the vendor.

Receive Inventory with a Bill

When you receive the items and the corresponding bills for them, here’s what you need to do.

QuickBooks Desktop for Windows

1. Navigate to the Receive Inventory dropdown menu and then choose Receive Inventory with Bill.
2. On the Enter Bills window that shows up:

• Select the vendor from the Vendor dropdown menu.
• Press Yes to receive a purchase order for the Bill.
• Choose the correct PO, then hit the OK tab.
• Review the information on the Bill. Note: Except for the Memo field, any fields that were filled in on the PO are carried over to the Bill.
• Click on Save & Close.

3. Once you’re ready to pay the Bill, proceed to Pay Bills. 

QuickBooks Desktop for Mac

1. Move to Vendors and then choose Receive Items.

Note: You can also enter a bill using the Transaction Center.

2. Type the vendor’s name, Amount due, date, reference number, and payment terms.
3. Write a memo about the Bill. The memo you enter appears on reports that include the Bill (it’s not mandatory). 
4. Hit the Items tab.cfg.
5. Select the purchase order, and then click OK.

Note: If you didn’t have a purchase order, add the items under the detail area.

6. Choose the Expenses option to enter the shipping charges or taxes. 
7. Press Save. 

Receive Inventory Without a Bill

You can use this option if you received the items, but the vendor did not provide the Bill yet. When receiving items without a bill, QuickBooks will create an Item Receipt that increases your inventory asset account and accounts payable. To properly handle this situation, you need to record a Receive Inventory without a bill.

Here’s how:

QuickBooks Desktop for Windows

1. Open your QuickBooks desktop company file. 
2. Hover over the Receive Inventory dropdown menu and then choose Receive Inventory without a bill.
3. On the Item receipt window that displays:

• Click on the vendor name from the dropdown menu.
• Press Yes to receive a purchase order for the Bill.
• Select the correct PO, then hit the OK tab.
• Check the information on the Item Receipt. 

Note: Except for the Memo field, any fields that were filled in on the PO are carried over to the Item Receipt.

• Hit the Save & Close tabs.

4. When you receive the Bill for the inventory, proceed to Entering bills against Inventory.

QuickBooks Desktop for Mac

Step 1: Create an Item Receipt

1. Navigate to Vendors and then choose Receive Items.
2. Press New or the Plus (+) icon.
3. Select the name of the vendor.
4. Click on the purchase order, then hit OK.

Note: If you didn’t have a purchase order, add the items in the detail area.

5. Press Save.

Step 2: Enter a bill when you receive the goods

1. Head to Vendors, and then choose Enter Bill for Received Items.
2. Type the vendor’s name.
3. Select the item receipt for the Bill, then click OK.
4. If required, change the date shown and the Amount in the Bill.
5. Hit the Expenses tab to enter the shipping charges or taxes (Optional).
6. Enter the vendor’s terms.
7. Check that the Amount due is the same total on the Bill. If the total is incorrect, click Recalc.
8. Press Save.

How to enter bills against inventory in QuickBooks Desktop?

Once you receive inventory without a bill, you can easily enter the appropriate bill against the inventory in QuickBooks Desktop. This will record the corresponding payable for the item receipt. Here’s a simple guide to help you enter a bill against Inventory in QuickBooks Desktop:

1. Choose Enter Bills against Inventory from the Home page.
2. On the Select Item Receipt window:
   • Click on the correct vendor name in the Vendor dropdown menu. 
   • Select the Use Item receipt date for the bill date checkbox to keep the original inventory availability date. 
   • Opt for the Item Receipt that corresponds to your bill.

Note: If there are multiple Item Receipts, convert each bill separately.

3. Press OK. QuickBooks converts the Item Receipt into a bill.
4. When you are ready to pay the bill, proceed to pay the bills.

Steps to Manage and Enter Bills for Received Items in QuickBooks Online

QuickBooks Online makes it easy to record business expenses and track sales. Entering your income and expenses gives a more comprehensive picture of your financial statement and cash flow. 

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 vendors at once. However, if you’ve already paid for a business expense, enter it as an expense. These specific transaction types let QuickBooks know how to record everything.

Review and Manage Bills 

1. Log into your QuickBooks Online account.
2. Navigate to Expenses and then select Bills.
3. The Bills page contains the For review, Unpaid, and Paid tabs. Choose one of the tabs to view bills in that status and see available Actions:

• For review: This tab lists all of the bills pending your review, including bills sent by other QuickBooks users through the QuickBooks Business Network.
• Review: Check the details of the Bill so you can ensure accuracy, then Save it to move it to the Unpaid tab, or schedule payment.
• Save: Move the Bill to your Unpaid tab. If the Bill is for $0.00, then it’s added to the Paid tab instead.
• Unpaid: This tab lists all of your unpaid bills and if they are due later, soon, or overdue.
• Schedule payment: Use a QuickBooks connected bank or credit card to pay for the Bill.
• Mark as paid: Use for offline payments that are not directly scheduled via QuickBooks.
• View/Edit: Make any needed changes to the Bill, then press either Save, Save and schedule payment, or Mark as paid.
• Paid: This tab contains all of your paid bills and any linked payments. Select any bill to view details. 

Add a Bill Manually 

Once you get a bill from a vendor, here’s how to record it:

1. Click + New.
2. Select Bill.
3. Under the Vendor dropdown menu, click on a vendor.
4. Choose the Bill’s terms from the Terms drop-down menu. This is where your vendor expects to be paid.
5. Type the Bill date, Due date, and Bill no. as they’re recorded on the Bill.
6. In the Category details section, enter the bill details and select the expense account you use to track expense transactions from the Category dropdown. Then, write a description. 

Tip: You can also enter specific products and services in the Item details section to itemize the Bill. To set up this, do the following:

• Move to Settings and then choose Account and Settings. 
• Then, click on Expenses. Select the pencil icon under the Bills and Expenses section. 
• After this, turn on the Show Items table on the expense and purchase forms switch.

7. Enter the Amount and tax.
8. If you plan to bill a customer for the expense, tick mark the Billable checkbox and then write their name in the Customer field. 
9. Once you’re ready, press Save and Close.Bills added manually display directly under the Unpaid tab as once you’ve added the Bill, you don’t need to review it.

Upload Bills from the Computer  

1. Navigate to the Expenses and then select Bills.
2. Choose Upload from the computer in the Add bill dropdown menu.
3. Drag and drop files into the Upload window, or press the Upload button to choose files on your computer.

Note: QuickBooks only supports PDF, JPEG, JPG, GIF, and PNG images.

The Bill is added to the For Review tab, where you can verify the information and schedule payment or pay later. You can also receive bills from another QuickBooks user. Accounts Payable Automation can identify the vendor details and QuickBooks notifies you to review the Bill from your Bills list.

When to enter bills in QuickBooks Desktop?

You must enter bills when you have received goods or services from a vendor, supplier, or service provider but have not yet paid for them. It allows you to track your payables, maintain accurate financial records, and manage cash flow more efficiently.

Below are some specific instances when you need to enter bills in QuickBooks Desktop: 

• 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 to offset future payments or to request a refund.
• 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 recurring expenses like rent or utilities, enter bills regularly so you can track these liabilities and payments.
• Enter a bill when you receive an invoice from a vendor for goods or services to update your account payables and track how much you owe to vendors and when payment is due. 
• Enter the bill before making the payment, using QuickBooks Pay Bills feature, allowing you to properly match payments to outstanding bills and check that your accounts payable and cash flow reports are accurate.
• Enter bills when you purchase inventory to ensure that both the expense and inventory levels are properly recorded.

Bottom Line!

Entering bills in QuickBooks Desktop is essential for managing your accounts payable, improving cash flow management, and avoiding payment errors. It also provides you accurate financial reporting such as the balance sheet and profit & loss statement, manage upcoming payments and follow accrual-based accounting compliance. 

With this, you can easily track what you owe to vendors, set up future payments, and stay on top of your finances. Once bills are entered, QuickBooks allows you to manage payments efficiently, ensuring timely settlements, better cash flow control, and avoidance of duplicate or missed payments.

FAQs:

how to set up recurring bills in QuickBooks desktop?

You can use templates to set up a recurring bill in QuickBooks Desktop.

Here’s how:

1. Create or Open a Bill: Start by creating a new bill or opening an existing one.
2. Enter Recurring Information: Input the details that will remain the same for each bill, like the vendor, account, items, description, and amount.
3. Set as Recurring: At the bottom of the bill, click on the “Make Recurring” option.
4. Customize Recurring Settings: QuickBooks will duplicate the bill and allow you to enter specific preferences, such as:
   • Template Name: Give the template a recognizable name.
   • Type: Choose from options “Scheduled,” which automatically creates the bill based on your chosen schedule.
     • Weekly: You can set it to repeat every 1, 2, or more weeks.
     • Twice a Month: Create two separate transactions for different dates in the month.
     • Quarterly: Schedule the bill to recur every 3 months.
     • Semiannually: Set it to repeat every 6 months.
5. Reminder: reminds you to create the bill using the template.
6. Unscheduled: you use the template to create the bill as needed from the recurring transactions list.
7. Define when the recurring bill should start and, if needed, set an end date or choose to continue indefinitely.
8. Once everything is set, click “Save Template” to finalize your recurring bill.