How to Enter and Pay Bills in QuickBooks Desktop

Before you start

• A bill records what you owe a vendor now and pay later. The first bill you enter adds Accounts Payable to your chart of accounts.
• Intuit describes two workflows: bills that follow a purchase order, and bills that don't. Purchase orders are in Pro, Premier and Enterprise.
• If the stock already arrived on an item receipt, enter the bill against that receipt in Step 2.
• Pay bills from Pay Bills, not by writing a check. Intuit warns that a check leaves the bill open and your reports wrong.

If the bill arrives with the goods, see how to receive inventory against a purchase order. It records the stock and the bill together.

Step 1: Enter the bill

1. 1Go to Vendors > Enter Bills.
2. 2Choose the supplier in the Vendor dropdown.
3. 3Fill in the Date you received the bill, the Amount and the Due date.
4. 4Use the Expenses tab for costs such as rent, phone service or utilities.
5. 5Use the Items tab for things you buy, sell or resell, such as products, shipping charges and discounts.
6. 6Select Save. QuickBooks records the bill in Accounts Payable.

Step 2: Convert an item receipt into a bill

1. 1On the Home page, select Enter Bills Against Inventory.
2. 2Choose the vendor, then pick the item receipt the supplier's bill covers.
3. 3To keep the receipt's date as the bill date, select Use Item receipt date for the bill date.
4. 4Select OK. QuickBooks turns the receipt into a bill, ready for Pay Bills.

Each item receipt converts on its own. Our guide on how to receive inventory against a purchase order covers the receipt date option and partial receipts.

Step 3: Pay the bills

1. 1Go to Vendors > Pay Bills.
2. 2If you use more than one accounts payable account, choose the right one from the dropdown.
3. 3Select Show all bills, or select Due on or before and enter a date to narrow the list.
4. 4Select the checkbox for each bill you're paying. Select All Bills and Clear Selections mark or unmark the whole list.
5. 5Set any discount or credit on the selected bills (see Step 4 and the next section).
6. 6Enter the date you're paying.
7. 7Choose the payment method: Check, Credit Card, or one of the online payment options.
8. 8For a check you write by hand, select Assign check number. To print it, select To be Printed.
9. 9Select Pay Selected Bills, then Done, or Pay More Bills to start another run.

Paying by cash, debit card or EFT? Intuit suggests choosing Check and Assign check number, then typing the payment type in the number field or leaving it blank.

Step 4: Take an early-payment discount

Intuit's Pay Bills help says to use the Discount option when your vendor gave you a discount on the bill.

1. 1In Pay Bills, select the bill.
2. 2Select Set Discount.
3. 3On the Discount tab, enter the Amount of Discount.
4. 4Choose the Discount Account to post it to. Ask your accountant which account to use.
5. 5Select Done, then Pay Selected Bills.

Check the discount amount against the supplier's invoice before you pay.

Apply a vendor credit while you pay

If the supplier owes you a credit, select the bill in Pay Bills, then select Set Credits. Pick the credit on the Credits tab and select Done. Our guide on how to record a vendor credit and a vendor refund covers this in full.

Pay part of a bill

• In Pay Bills, enter the amount you're paying now in the bill's Amt. To Pay column.
• Intuit's Bill Pay service, which pays bills online from QuickBooks, doesn't offer partial payments yet. Intuit suggests separate, smaller bills, or editing the bill total.
• Bill Pay also pays only the full bill amount, so apply credits and discounts before you schedule the payment.

If a bill doesn't show in Pay Bills

• Check that the bill was entered at all.
• Select Show all bills and scroll up and down the list.
• Check your other accounts payable account, if you use more than one.
• Check whether it's already paid. Run Reports > Vendors & Payables > Transaction List by Vendor and add the Billing Status column in Customize Report.

To list every open bill on a past date, run Reports > Vendors & Payables > Unpaid Bills Detail. In Customize Report > Advanced, set Open Balance/Aging to As of Report Date, then enter the date.

Where QuickBooks Desktop leaves the work to you

• Someone keys in every bill from the supplier's invoice, line by line.
• Someone has to review each bill against the purchase order or item receipt it came from.
• Someone picks the bills for each payment run and checks for discounts and credits first.
• Pay Bills only lists what's in the file. A bill still sitting in someone's inbox won't show up.