In this tutorial, we’re going to cover how to pay bills in QuickBooks. We’ll cover the two QuickBooks Online bill paying options. The first option is paying bills with checks printed directly from QBO. The second option is paying bills online using Bill.com, which is integrated with QuickBooks Online. Let’s begin.
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Why You Should Use QuickBooks Online Bill Paying
The QuickBooks Online bill paying service is ideal for businesses that want to determine when and how their bills are paid but prefer to have a third party process the bill payment. If you have heavy accounts payable and it’s been difficult to stay on top of making on-time payments, you should use the QuickBooks Online bill paying service.
In order to use the QuickBooks Online bill paying service, you must enter your bills into QuickBooks first and then pay them using the QuickBooks Online bill payment feature. By paying bills in QuickBooks, your bills will automatically be flagged as paid which means they are no longer outstanding. Your accounts payable balances will automatically update to reflect bill payments. As discussed, you can pay bills by writing a check or using the Bills.com payment service that is integrated in QuickBooks.
If you generally pay your bills as soon as they come in as opposed to waiting until the bill is due, you do not want to use the QuickBooks Online bill paying feature. Instead, you can simply write a check in QuickBooks.
How to Pay Bills in QuickBooks via Check
To pay bills in QuickBooks via check, you will complete four steps. First, you will navigate to the pay bills window. Second, you will select the bills to pay. Third, you will verify all of your bill payments are in the check register. Fourth, you can print checks directly from QuickBooks to pay the bills.
The four steps on how to pay bills in QuickBooks via check are:
1. Navigate to Pay Bills
From the Homepage, click on the plus sign located at the very top part of the screen:
Navigate to Pay Bills in QuickBooks Online
In the next screen, select “pay bills” which is located below the Vendors column as indicated below:
Select the Pay Bills Option in QuickBooks Online
2. Select Bills for Payment
In the next screen, the Pay Bills window should display. Since the bills entered previously, most of the fields in this screen will be completed. You just need to select which bills you want to pay.
Select which bills you would like to pay as indicated below:
Select Bills for Payment in QuickBooks Online
A brief description of each field in the Bill Payment selection screen is below:
- Payment account: Select from the drop-down menu and the bank account where you’ll make the payments from.
- Payment date: Input the payment date, which will typically be your check date.
- Bill notifications: Pay attention to any bill notifications. QuickBooks provides a summary of the number of open (outstanding bills). Any overdue bills are referenced with an exclamation point, as indicated in the screenshot above.
- Bill selection: Select which bills you would like to pay by clicking on the box in the first column. Based on your selection, QuickBooks will put a check mark in this column.
- Payee: Enter the name of the company or individual you’ll be paying. Typically this will be your vendor’s name, but if for some reason the payee differs from your vendor’s business name then you can update the vendor profile with this information. In the Setting up Vendors tutorial, we walk through step by step how to set up your vendors in QuickBooks.
- Ref no: No action is required in this field, as it simply displays the vendor’s invoice number.
- Due date: Review this field to see the due date of the bill. Notice that QuickBooks will indicate with an exclamation point if the bill is past due.
- Open balance: Shown in this field is the unpaid (open) amount due for the invoice, also known as accounts payable balance.
- Credit applied: No input is required in this field. Instead, if you have entered any credit memos you received from your supplier, they will show up here to reduce the amount that you owe.
- Payment: No input is required in this field, but review it to make sure it reflects the amount you would like to pay. QuickBooks will automatically populate this field with the total amount due. However, you can pay less than the total amount due by simply typing directly in this field.
- Total amount: No input is required in this field, as it will automatically populate with the payment column.
- Total payment: Review this field to see the total amount of payments that will be made.
- Starting check no: If you are prepared to print checks now, enter the starting check number that you will load into the printer. If this is your first time printing checks, check out our How to Print QuickBooks Checks article for step by step instructions on where to buy & how to print checks in QuickBooks Online.
- Print later: Put a check mark in this box if you will print checks at a later date.
- Save: You can save and print or save and close the bill payment window.
3. Review Payments in the Check Register
After saving your bill payment selections, navigate to the check register to confirm the payments were properly recorded in QuickBooks. Once you’re in the check register menu, you can review all the fields to make sure everything was input correctly.
From the left-hand menu bar, click on Transactions and Banking as indicated below:
Navigate to Banking Center in QuickBooks Online
Next, click on the Go to Register button which is about half-way down the page on the right:
Navigate to Check Register in QuickBooks Online
The bill payments that you created will be located at the very top of the list, as indicated below:
Bill Payments in QuickBooks Check Register
A brief description of the fields in the QuickBooks check register are:
- Check date: This is currently the date of the check but it will be updated once you print the check.
- Ref No. / Type: In this field, you will notice the “To Print” field. This field will be updated to reflect the check number once the check has been printed. Below the “To Print,” you will see Bill Payment. QuickBooks assigns Bill Payment as the transaction type for these payments.
- Account: Below the payee you will see the Accounts Payable account. TIP: Besides the checking account, this is the other account that is impacted when you pay bills. See the next section for additional information on how paying bills affects the financial statements.
- Balance: This column reflects the balance in the bank account after these payments were created. TIP: QuickBooks will reduce the balance in the bank account whether you have printed a check or not.
4. Confirm Payment Was Correctly Applied
After confirming payments were properly recorded in the check register, you should verify that the status of the bill is paid which means the accounts payable balance has been reduced for that vendor.
From the left navigation bar, select Vendors as indicated below:
Confirm Payment Was Correctly Applied in QuickBooks Online
A list of vendors will appear, click on the vendor that you created a bill payment for as indicated below:
Confirm Bill Payments were Applied Correctly in QuickBooks Online
In the next screen, you will select the bill that was paid as indicated below:
Select the Bill that was Paid in QuickBooks Online
The bill will display in the next screen. If payment was applied correctly, the status of the bill should be PAID as indicated below:
Status of a Paid Bill in QuickBooks Online
How to Pay Bills With the QuickBooks Online Bill Paying Service
Paying bills with the QBO bill paying service, Bill.com, is very easy. You will navigate to the pay bills window and select the bills you want to pay. Next, you will select the bills you want to pay and decide the amount and payment date. After selecting the payment method you will submit your bills for payment.
Before paying bills with QuickBooks Online bill paying service, you need to sign up for a Bill.com account. To do this, simply log in to your QBO account, navigate to the Pay Bills window and you should see the option to sign up for a Bill.com account. If you don’t see the sign-up info, head over to the Intuit apps store, locate Bill.com, and sign up for an account.
Follow these seven easy steps to pay bills with QuickBooks Online bill paying service:
1. Navigate to the QuickBooks Online Bill Paying
From your QBO Dashboard, click on the plus sign to display the Quick Create menu as indicated in the screenshot below:
Navigate to QuickBooks Online Bill Paying Service
2. Select the Pay Bills Option
Below the Vendors column, select the Pay Bills option as indicated in the screenshot below:
Select Pay Bills in QuickBooks Online
3. Select the Bills to Pay Using Online Payments
In the first column, put a check mark next to each bill that you would like to pay by clicking in the box located to the left of each bill, as indicated in the screenshot below:
Select the Bills to Pay using Online Payments Source: QuickBooks Online
4. Enter the Bill Payment Amount
As you select bills to pay, QuickBooks will automatically assume that you want to pay the total amount due. It will populate the payment column with the total amount due. However, you can pay a different amount by typing the amount you want to pay directly in the payment column.
Once you select a bill, QuickBooks will automatically populate the “payment” column with the amount in the “open balance” column, as indicated in the screenshot below:
Enter the Bill Payment Amount Source: QuickBooks Online
5. Select a Payment Process Date for Each Bill
In the “process date” column, enter the date you would like the funds withdrawn from your bank account, as indicated below:
Select a Payment Process Date for Each Bill Source: QuickBooks Online
6. Select a Payment Method for Each Bill
With your Bill.com service, you can elect to send electronic payments (bank transfers) or checks. In addition to a monthly subscription fee, bank transfers will cost you 99 cents each and checks are $1.99 each.
In the “payment method” column, you can select bank transfer for check, as indicated in the screenshot below:
Select a Payment Method for Each Bill Source: QuickBooks Online
7. Review & Submit Bill Payments
Be sure to review the bills that you have selected for payment to make sure the amount, process date and payment method are correct.
Once you are ready, click the “Review and submit” button located in the lower right hand corner, as indicated below:
Review and Submit Bill Payments Source: QuickBooks Online
How QuickBooks Online Bill Paying Affects the Financial Statements
Paying bills in QuickBooks affects one primary financial statement ― the Balance Sheet report. The two accounts that are affected are the checking account and the accounts payable account. Both of these accounts are decreased when a bill is paid.
The accounts and financial statements affected by paying bills in QuickBooks are:
| Account Affected | ||
|---|---|---|
| Checking account | ||
| Accounts Payable account |
Frequently Asked Questions (FAQs) About How to Pay Bills in QuickBooks
Below, we have included the most frequently asked questions small business owners have about how to pay bills in QuickBooks. If you don’t see your question, visit the Fit Small Business Forum and post your question there. We answer hundreds of questions from small business owners like you every day.
The most frequently asked questions about how to pay bills in QuickBooks are:
Can you pay bills directly from QuickBooks?
You can pay bills directly from QuickBooks by printing a check or using the Bill.com service. Check out QuickBooks Checks to learn more about printing checks from QuickBooks. If you prefer to use Bill.com, you’ll pay $49.99 per user, per month plus 99 cents for ACH transactions and, $1.99 for checks.
How do I apply a payment to a bill in QuickBooks?
To apply a payment to a bill in QuickBooks, follow these steps: First, navigate to the Pay Bills window. Second, select the bill that you need to apply a payment to. Third, enter the details of the payment (e.g., payment method, amount paid, and date). Fourth, save the payment information.
How do I pay a bill with cash in QuickBooks?
To pay a bill with cash in QuickBooks, you should set up a petty cash account in QuickBooks. It’s important to establish a petty cash policy and assign one person to manage all petty cash requests. To learn more about how petty cash works, check out our article on how to do petty cash accounting.
Wrap Up
By now, you have a clear understanding of your options when it comes to paying bills in QuickBooks Online. You can pay your own bills by writing checks directly from QuickBooks or sign up for the Bill.com payment service and let them do the heavy lifting for you.
In our next tutorial, we will show you how to manually enter banking transactions you were unable to import into QuickBooks. Sign up for a free 30-day trial of QuickBooks Online. Click the button below to proceed to the next tutorial.
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