Paying bills can certainly be a tedious process, fortunately, QuickBooks Online has a number of tools to guide you through the process! Utilizing the Accounts Payable flow in QBO will help ensure that your bills are paid timely and recorded properly.
For a cash basis business:
- When money is paid to a vendor for a service at the time of service, select the “Expense” transaction under the “+ New” button in QBO. This payment could be cash, credit card, or ACH.
- If you instead make a payment with a check, please use the “Check” transaction under the “+ New” button to record the payment, including the check number. If you are printing checks out of QuickBooks, you can do so after entering this transaction.
- Both of these methods allow for you to select the specific expense account for the transaction.
ProAdvisor Tip: Whenever you utilize a saved vendor, QBO will automatically fill in the expense account and amount from the most recent transaction from that vendor – saving you time entering the information. Keep in mind, you can always create reoccurring transactions to minimize your data entry.
For a business utilizing accounts payable on an accrual basis:
- The A/P flow will begin with a “Bill” transaction from the “+ New” button. Bills are utilized to record amounts due to vendors for services when the due date is in the future. Any amounts entered in as a bill are put to the accounts payable account.
- When you are ready to pay the bill, utilize the “Bill Payment” transaction under the “+ New” button to select and record the payment. The bill payment screen will allow you make one payment for multiple bills due to the same vendor – thus, you will be able to keep the detail of the individual bills and still match your payments during the bank reconciliation.
ProAdvisor Tip: Even if you are a cash basis taxpayer, you can still enter bill and utilize the above accrual workflow to keep track of your upcoming bills.
Utilizing the Accounts Payable flow recommended by QBO will help streamline your bill payment process, so they are not only tracked and paid timely, but also recorded correctly in your QBO file. If you have any questions on this or anything else QuickBooks related, please give us a call at 419-289-7007 and our team of QuickBooks ProAdvisors would be happy to assist you.