How To Enter Bills in QuickBooks Online
This article is part of a larger series on Accounting Software.
In this tutorial, you’ll learn step-by-step how to enter bills in QuickBooks Online, which will allow you to track upcoming payments and generate up-to-date expense figures.
We created this free tutorial to help you learn how to use QuickBooks Online, our leading small business accounting software. It’s best that you follow along in your own QuickBooks account, but if you don’t have one yet, you can choose from a 30-day free trial or 50% off for 3 months.
This tutorial is just one in our series of free QuickBooks tutorials. The video below and the step-by-step instructions that follow present the same information.
Click + New at the top of the left-hand menu bar, then select Bill under Vendors in the second column, as shown below.
Navigate to create a new bill in QuickBooks Online
QuickBooks Online will then display a screen to input the bill information. The actual fields that appear for your company will depend on your choices when you set up your advanced settings.
Heads up!
Before entering a bill, it’s important to set up your vendors and set up your product and service items. The information contained in these components will flow automatically to the Create Bill screen and populate many of the required fields. However, you’ll have the opportunity to add new vendors and new products and service items as you create bills.
Create bill screen in QuickBooks Online
The information to create a bill is very similar to the information needed to create a check as you learned in our previous tutorial. Some of the fields you need to complete include:
- A. Vendor: Choose the vendor that sent you the bill or choose Add new to set up a new vendor. Once you select a vendor, the fields for Mailing address and Terms will populate automatically.
- B. Bill date: Enter the invoice date from the bill. The due date is determined by applying the payment terms to the invoice date, so the bill date must be the invoice date and not the date the bill was received or entered.
- C. Due date: The due date should calculate automatically based on the terms and bill date, but I recommend verifying the calculated date matches any due date shown on the bill.
- D. Bill no.: Enter the bill or invoice number from the vendor’s bill. This will be very helpful if you need to contact the vendor with questions about the bill.
Avoid entering bills twice.
QuickBooks Online will provide you a warning message if you try to enter the same bill twice based on the vendor name and invoice number. Therefore, by providing the invoice number, you can avoid duplicate entries.
- E. Category: Expenses not billed to customers should be assigned to a category. Select the category from the drop-down list or click Add new to set up a new account.
- F. Description: Provide a description of the expense.
- G. Amount: Enter the amount of the expense.
- H. Billable: Place a checkmark here to make the expense billable to the customer. However, the better way to handle billable expenses is to assign them to product or service items instead of a category.
- I. Tax: Place a checkmark here if you are required to collect sales tax when the expense is billed to the customer.
- J. Customer/Project: Select the customer/project that you wish to bill the expense. If it’s a new customer or project, select Add new to set up a customer or project.
- K. Product/Service Item: Purchases of items you will sell to customers must be assigned to an inventory item. Services and expenses billed to customers must be assigned to a service item. Select a product or service item or click Add new to set up a new product or service item. Once you select a product or service item, the fields for Description, Rate, Billable, Markup%, Tax, and Class will populate automatically.
- L. Qty: Enter the quantity of goods or hours of services purchased. After you enter quantity, the amount will calculate automatically as quantity times rate, and the sales amount will calculate as amount times markup percentage.
- M. Customer/Project: Choose the customer or project to bill the item or select Add new to create a new customer or project.
When you are finished inputting the required information, click the green Save and close button in the bottom right-hand corner.
After entering the bill, you can verify if the bill is correct by navigating to the vendor center. Hover over Expenses in the left-hand menu bar and then click Vendors.
Navigate to the vendor center in QuickBooks Online
QuickBooks Online will bring up the vendor center, which includes a list of vendors and outstanding bills displayed in the Open Balance column. From this page, locate the vendor that you entered a bill for.
Total bills outstanding shown in the vendor center.
To see the details of the total bills outstanding, click on the vendor’s name.
Vendor transaction list in QuickBooks Online
The bill you just entered should appear in the vendor’s transaction list.
Why Entering Bills in QuickBooks Is Important
Vendors that allow you to make purchases on credit will send a bill with a due date for payment. By entering bills when received, QuickBooks Online can help you track upcoming due dates to make sure bills are paid on time. It’s also helpful to know the total amount of bills or accounts payable (A/P) that your company owes. In a later tutorial, you’ll learn to run an A/P aging report, which depends upon all bills being entered.
By entering bills in QuickBooks and paying them as close to the due date as possible, you’ll have better control over your cash flow. Cash flow is often a problem for small businesses, and better control over it’s a major benefit of a good bookkeeping system like QuickBooks Online.
Wrap Up
Congratulations on learning entering bills in QuickBooks Online. The next tutorial in our QuickBooks Online Training Course is How to Pay Bills in QuickBooks Online, where you’ll learn how to pay bills by either printing checks or making electronic payments.