This article is part of a larger series on Accounting Software.
We’re pleased to present this tutorial for FreshBooks, our pick for one of the best QuickBooks alternatives. In this third tutorial, we’re going to cover how to add vendors and enter, track, and pay bills in FreshBooks. We’ll also look at how to manage and view unpaid bills.
You’ll receive the most benefit from this tutorial by following along in your own FreshBooks account. You can try FreshBooks for free, or receive 60% off for six months.
Do you want to learn more about other options? Read our picks for the best small business accounting software.
How To Add Vendors in FreshBooks
To add a vendor in FreshBooks, first click on Expenses on the left menu bar, and then the Vendors subsection. This will take you to the Vendors screen, where you’ll click on the green New Vendor button. Alternatively, if you’re on the Dashboard, you can click on the Create New… button, and then select Vendor.
This will take you to the New Vendor screen. From here, you can fill out your vendor’s profile by following these steps:
- Enter a Company Name.
- If no Company Name is entered, enter a First Name and Last Name.
- Fill out these optional fields:
- In the Account Number field, enter your account details with the vendor.
- Add an email in the Email Address field.
- Enter a URL in the Website field.
- Enter a number in the Phone Number field.
- Specify the vendor’s address by filling in the Street, City, State/Province, and Zip.
- Code, and Country fields.
In the Vendor Settings, you can specify:
- Currency & Language: Change the default currency and language for this vendor
- Tax Type: Indicate whether this vendor is a 1099 contractor in this field, which will make processing 1099s a lot easier at tax time
- Sales Tax Type: Specify if you pay sales tax to this vendor, and follow the steps to Add Sales Tax
Be sure to click Save to finish setting up your vendor’s profile.
How To Enter an Unpaid Bill in FreshBooks
To enter an unpaid bill in FreshBooks, select Expenses on the left menu bar and then Bills. This will take you to the Bills screen, where you can select New Bill. You’ll then be taken to the Add Vendor screen.
To add a new bill, enter the following information:
- Click on the Add Vendor text and type in a new vendor or choose from a list of vendors that you have used before.
- The Issue Date defaults to the current date automatically, but you can click to change it to another date instead.
- Change the Due Date to when the bill is due for payment (the default is one month from the issue date).
- If needed, add a number in the Bill Number field.
- Click on the Add a Line button and then the Description field, where you can enter details about the bill.
- Click on Add Category and choose a category or subcategory.
- Specify the Rate and click on Add Taxes if you want to add taxes to the invoice.
- The Qty will default to 1; if needed, you can click and change the quantity.
- Repeat these steps as necessary to add more items or services to your bill.
- When you’re done, click on the Save button to finish.
Below is an example of what a completed bill will look like once all of the necessary information has been entered. Keep in mind that you can also upload an image of the original bill or any supporting documentation by clicking on the box below the green Save button.
You can also change the currency and language of the invoice, which can be useful if you have international vendors. Adjust the settings to the right of the invoice by clicking on Currency & Language and change it if necessary. Make sure to click Done to save the information.
How To View Unpaid Bills in FreshBooks
You can quickly view a summary of vendors and any unpaid bills for each by navigating to the Bills screen. Below the Recently Updated section, you’ll see the All Bills section. This list of bills displays the vendor name, category, issue date, description, amount, and status of the bill.
View an Accounts Payable Aging Report
The Accounts Payable (A/P) Aging report shows which vendors have outstanding bills that need to be paid. You can access the A/P Aging report by clicking on Reports on the left menu bar and then Accounts Payable Aging under Payments Reports.
On your A/P Aging report, bills are grouped by Outstanding or Overdue into intervals of 0-30 days, 31-60 days, 61-90 days, and 90+ days. You can click on either the Vendor or Total headers at the top of the report to sort the data in ascending or descending order by that particular header.
Selecting More Actions at the top right will give you the option to export the report to Excel or to print your report.
To adjust your view of the A/P Aging report, click on Filters under Settings. From there, you can select:
- Reset All: Click on this link to restore the filters to the default settings
- As Of: Select between Today, End of Last Month, End of Last Quarter, End of Last Year, or Custom to enter a specific date range
- Group By: Choose between Outstanding (past the bill issue date) or Overdue (past the due date) bills
- Currency: Toggle between multiple currencies
How To Record the Payment of a Bill in FreshBooks
To pay bills that have already been entered into FreshBooks, go to the Expenses section on the left menu bar and then click on the Bills sub-section. Click on the bill that you want to mark as paid. Click on More Actions and then select Add a Payment in the upper right corner of the screen, as shown below.
Then, you’ll see the Add a Payment pop-up. The Amount will be populated with the full total of the bill, but you can adjust this if the amount paid is different.
- Select the Payment Method in the drop-down menu.
- The Date of the payment will default to the current date, but you can click to change it to a different date if needed.
- Add details about the payment in the Payment Notes field if desired.
- Click Add Payment when you’re finished and the bill will then be marked as paid.
How To Manage Bills in FreshBooks
You can also perform other actions quickly from the Bills section by hovering over any bill to quickly access the following:
- Edit: Click on the pencil icon and you’ll be taken to the edit screen of the bill that allows you to adjust and save it
- Delete: Click on the trash can icon to delete the bill. You can view all archived bills by clicking on the View Archived Bills link at the bottom of the list
- Add a Payment: Click on the coin icon to add a payment to the bill
- More Actions: Click on the ellipsis icon for additional actions, including:
- Duplicate: Click on the two papers icon to create a copy of your bill
- Change Category: Click on the pizza icon to update the category of the bill
- Change Vendor: Click on the person icon to update the vendor on the bill
- Archive: Click on the box icon to move the bill to your Archived Bills list
You have now learned how to track and pay bills in FreshBooks. The next tutorial in our FreshBooks course is “How to Reconcile Accounts and Classify Transactions.” That tutorial will cover how to classify imported bank transactions, how to match imported transactions with existing FreshBooks transactions, how to reconcile bank accounts, and how to print a reconciliation report.