LESSON 4 EXPENSES AND VENDOR

Entering bills
Learning outcomes
In this lesson, you’ll learn how to:

1. Recognize how to enter bills

Topics

 Bill basics
 Recording a bill

The story so far

Craig’s business handles a lot of different landscaping jobs, big and
small. Sometimes he needs equipment or machinery for his bigger
jobs. This is expensive to buy, so renting it is the most cost-effective
option for Craig.
Luckily, Craig has a great relationship with Ellis Equipment Rental. He
has a payment term agreement to pay them 30 days after he rents
machinery.
Following a big job last month, Craig’s received a bill from Ellis that
needs to be entered in his books.

How can QuickBooks Online help?

Luckily for Craig and us, QuickBooks Online has features that can
keep track of this kind of bill. Let’s see how we can get the bill
recorded.

Bill basics
In basic terms, a bill is what a vendor sends you when you owe them
an amount of money. When a bill is paid to a vendor, money goes out of
the business.
The Bill screen in QuickBooks Online is a purchase form. When a bill
is recorded, this form posts an accrual transaction—the expense is
recorded as incurred but no cash has been paid yet.
The total amount of the bill will post as a credit to increase accounts
payable.
Craig records bills when he is not going to pay the vendor right away.
Basically, he’s recording the purchase to a date or period that is
different than the payment date.

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ProAdvisor tip
In QuickBooks Online, bills are something that vendors send us.
Invoices are something we send our customers.
So, when Ellis Equipment Rental sends us their invoice, we enter it as
a bill in Craig’s QuickBooks Online.

Recording a bill
Let’s get the bill recorded. You’ll need to download the bill to input the
details for Craig. Select the link in Tools and when it’s downloaded,
open it.
Watch the video to see how it’s done. The individual steps are below
for you to follow.
Task download:

 Ellis Equipment Bill.pdf?1589195222

1. From Craig’s dashboard screen, select Expenses in the Left

Navigation Bar to go to the Expenses Center
2. In the top right, select the green New Transaction button and from
the drop-down, select Bill
3. In the Bill screen that opens, select the down arrow next
to choose a payee and select Ellis Equipment Rental
4. Now add the bill details. Make the bill date today’s date
5. Select the terms from the drop-down: choose Net 30. Note how the
due date is calculated automatically.
6. Now enter the details from the bill. The account is Equipment
Rental and the description is 2 days’ excavator rental
7. Enter the amount as $250
8. One of the cool features of QuickBooks Online bill recording is
that we can attach a copy of the original invoice. That way, we
can always keep the invoice from Ellis Equipment Rental with the
bill in QuickBooks Online, so that when Craig comes to pay it and
record that payment against the bill, he can see everything
together.
9. Start by selecting the attachment link, below the Memo box

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10. Navigate to the place you saved the invoice from Ellis. You
can also just drag and drop it into the box. The invoice will
upload and appear in the attachments box as a link
11. In the bottom right green drop-down, use the down arrow to
select Save and close
And we’re done!
Top tip: You can add attachments to most types of transactions in
QuickBooks Online.

Lesson check
When would you use a bill purchase form like the one we’ve just filled in for
Craig?


 When a vendor wants payment immediately

 When a vendor wants payment but not right now

 Neither of the above

That’s right. Craig or you would need to record bills when a request for
payment isn’t to be paid right now, like when terms are offered by a
vendor. It’s a way of recording the purchase to a date or period that is
different than the payment date.

Take our ProAdvisor challenge

Craig gets a lot of his business through word of mouth, but he also
advertises. He recently purchased some paving slabs with his
company logo to lay in gardens and driveways where his customers
allow.
Craig received his bill from Lee Advertising, with whom he has a
payment term of 30 days, for $1,500 for 300 paving slabs.
Select the question/heading to find out more.

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The challenge
Enter the bill for Lee Advertising into Craig’s account.
Open Craig’s QuickBooks Online

How did you do?

Check the Expense transaction list to see if the bill for Lee Advertising
appears in the list.

Hints and tips

1. From Craig’s dashboard screen, select Expenses in the Left

Navigation Bar to go to the Expenses Center
2. In the top right, select the green New Transaction button and from the
drop-down, select Bill
3. In the Bill screen that opens, select the down arrow next to Choose
a payee and select Lee Advertising
4. Now add the bill details. Make the bill date today’s date
5. Select the terms from the drop-down: choose Net 30
6. Note how the due date is calculated automatically.
7. Now enter the details from the bill. The account is Advertising and
the description is 300 paving slabs
8. Enter the amount as $1,500
9. In the bottom right green drop-down, use the down arrow to
select Save and close

ProAdvisor tip
Craig’s Landscaping is the sample company on QuickBooks Online test
drive. It’s designed for you to explore and try out new things without
worrying that you will break something or make a mistake.
Once you close this QuickBooks Online test drive company it is
completely refreshed, so please remember to allow sufficient time to
complete each activity. Don’t worry if you have to close the test drive
before you are finished—you can always begin again.