How to Enter Bills in QuickBooks Desktop?

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 way, you can keep track of all your account payables and know what or when a bill needs to be paid. Entering your income and expenses gives you a more clear picture of your business’s financial health as well as helps with budgeting and forecasting.

What is a bill in QuickBooks Desktop?

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.

Why do you need to enter bills in QuickBooks Desktop? 

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.

You may also read : How to Record Expenses in QuickBooks Desktop?

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.

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.

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. 

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.

You may also read: How to Record an Invoice in QuickBooks Desktop & Online?

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 or Record Bills in QuickBooks Desktop

You need to set up your business’s vendors, products, services, and items before entering your bills. Once done, follow these steps:

1. Navigate to the Vendors menu and then click Enter Bills.
2. Choose a vendor from the dropdown menu, then fill out the required fields:
   • Date: The date you received the bill.
   • Amount: The total amount of the bill.
   • Due date: The due date of the bill.
3. Select the type of bill you wish to record:
   • Expenses: Record a bill for expenses incurred by the business, such as phone service, rent, and utilities.
   • Items: Record a bill for anything that your company buys, sells, or resells in the course of business, including products, shipping and handling charges, and discounts.
4. Press Save to record the bill.

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.

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.