In this tutorial, we’re going to cover how to enter bills in QuickBooks that you receive from vendors. Let’s begin!

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Why Should I Enter Bills in QuickBooks Online?

If you receive bills from vendors who allow you to pay them sometime in the future, then you should enter these bills into QuickBooks Online.  This will allow you to keep track of the following information:

• What bills are outstanding (accounts payable)
• What bills you have paid
• Where you are spending your money

One of the many reasons why business owners purchase QuickBooks is to gain better control over their expenses.  By entering bills in QuickBooks and paying them as close to the due date as possible (without being late), you will also have better control over your cash flow.  It is beneficial for a business owner to hold onto cash as long as possible.  You never know when an emergency might occur and if you don’t have an available line of credit or cash in your bank account then that emergency could ruin your business.

How Do I Enter Bills in QuickBooks Online?

Step 1 – Navigate to Enter Bills

From the Home page, click on the plus sign at the top.

Below the Vendors column, select Bill as indicated below.

Step 2 – Enter Bill

The Enter Bill window will display on your screen. There are 14 fields that need to be completed as indicated below.

1. Vendor: Select the vendor from the drop-down.
   TIP: If you have not set the vendor up then you can do so here. Just click the drop-down arrow and click on Add New.  In the Setting up Vendors tutorial we walk through step by step to show you how to set up your vendors.
2. Mailing address: This field will automatically populate with the information that is in the vendor profile.
   TIP: If you did not enter the mailing address for your vendor then this field will be blank. You can enter the mailing address in this field but it will not update the vendor profile.
3. Terms: The payment terms will automatically populate with what was set up in the vendor profile.
   TIP: If you did not set special payment terms for a vendor then this field will default to the payment terms for all vendors. During the Setting up Expenses tutorial, we walked through step by step to show you how to set default payment terms for all vendors.
4. Bill date: This is the date that appears on the bill you received from your vendor.
5. Due date: Based on the payment terms, QuickBooks will calculate the due date for you. For example, the payment terms are Net 30 for this vendor. This means that the due date will be 30 days from the Invoice date.
6. Account details: If you are paying for a service such as utility expense or tax preparation services, then you will need to complete this section of the bill. However, if you are paying for a product, then you will complete the Item details section.
7. Item details: If you are paying for a product such as a piece of equipment that you will use in your business or inventory that will be sold to customers then you will complete this section of the bill.
8. Product/Service: From the drop-down, select the product or service that you are paying for.  If you have not set up the product/service then you can do so by selecting Add New from the drop down. In the setting up products and services list tutorial, we walk through step by step to show you how to set up the products and services list.
9. Description: This field will automatically populate from the product and services list. You can also type a customized description directly into this form. However, it will not update your product and services list.
10. Quantity: Indicate the quantity of your purchase, if applicable.
11. Rate: This field, containing the per product or per service cost, will automatically populate from the product and services list. You can also type the rate directly into this form.  However, it will not update your product and services list.
12. Amount: QuickBooks will multiply the quantity column by the rate column to calculate this field.  
13. Save: Once you have completed all of the necessary fields, save the bill.
14. Bill no.: This is the invoice # that appears on the bill you received from your vendor.
    TIP#1: To help prevent you from paying for something twice, it is very important that you enter the bill no.(invoice#) for all bills. Typically this will be a unique # issued by the vendor. If a vendor does not include an invoice # on the bill, then you should come up with a unique #. For example, you could use the date of purchase and/or the purchase order # in this field. Whatever # you come up with, be sure to write it on the actual paper bill for future reference. TIP #2: By entering the invoice #, QuickBooks will alert you if a duplicate bill no. (invoice #) has been entered. This feature can help to ensure that you do not pay a duplicate invoice that the supplier may send to you. In the Advanced Settings tutorial, we walk you through step by step on how to turn this feature on.

Step 3 – Review Bills

From the Home page, select Vendors from the left-hand menu bar as indicated below.

On this screen, you will see a list of vendors along with the open balance as indicated below. Click on the vendor’s name in the first column to go to the next screen.

From this screen, you can see the details of the outstanding invoices that make up the open balance.  Review the information to ensure that it was entered correctly.

How Do I Edit (Modify) a Bill that was Previously Entered?

If you do find that you need to make some changes to a bill that was previously entered, you can do so.  

Step 1 – Navigate to the Vendor Bill

From the Home page, select Vendors from the left-hand menu bar as indicated below.

On this screen, you will see a list of vendors along with the open balance as indicated below. Click on the vendor’s name in the first column to go to the next screen.

From this screen, you can see the details of the outstanding invoices that make up the open balance.  If you hover your mouse over any of the information right below the column headings, you can click to display the bill on your screen.

Step 2 – Edit Bill Information

The bill should display on your screen as indicated below.  Make any necessary changes and then save the bill.

What Impact Does Entering Bills Have on My Financial Statements?

When a bill is entered in QuickBooks to pay for something that is not going into inventory (i.e. office supplies or utility expense) the accounts and financial statements are affected as follows:

When a bill is entered in QuickBooks to pay for an asset like equipment or product that will be added to inventory, the accounts and financial statements are affected as follows:

Wrap Up

That wraps up How to Enter Bills in QuickBooks Online. In our next tutorial, we will show you How to Pay Bills previously entered into QuickBooks.

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