QuickBooks Bill

What the bill form asks for

Intuit documents the manual path in a fixed order. Select Create, then Bill. From the Vendor dropdown, select a vendor. From the Terms dropdown, choose when the vendor expects payment. Enter the Bill date, Due date, and Bill no. exactly as they appear on the physical bill. Enter the transaction information in the Category details section, use Item details for products and services when the purchase was itemized, then enter the Amount and any applicable tax, and Save and close.

Two of those fields have no equivalent on a form for money already spent, and they are the two that give the bill its behaviour.

Terms is the first. Intuit describes it as choosing when the vendor expects payment, which means it is not a note to yourself. It drives the due date, and the due date is the field every payables report reads.

The due date is the second. It is the only date on a QuickBooks purchase form that describes the future, and it is the reason a bill can be late. Nothing else in the purchase side of QuickBooks has a concept of late, because nothing else leaves an obligation standing.

The instruction to copy the Bill date, Due date and Bill no. exactly as they appear on the physical bill is worth following literally. Those three fields are what let somebody match your record to the vendor's record months later, when the only other thing they have to go on is an amount.

The second document, and the date that is not the bill date

Recording the payment is a separate transaction with its own form and its own date. Intuit documents the path: from your Dashboard, go to Expense and Pay Bills, select Pay Bills, select the account you want to pay the bills from in the Payment account dropdown, select the Payment date, select the bills you want to pay, and Save. The article notes you can record payments made by check, credit card, or cash.

So one purchase has two dates in your file. The bill date says when the cost was incurred and when the payable came into existence. The payment date says when the cash left.

That is exactly where accrual and cash basis reporting part company, and it is the only reason the distinction is worth the extra document. On an accrual basis the cost belongs to the bill date. On a cash basis it belongs to the payment date. A bill entered on 28 March and paid on 12 April is a March cost and an April payment, and both statements are true at once.

One small thing to know before you go looking for a bill you just entered. Intuit notes that bills you upload or receive through the QuickBooks Business Network appear in the For review tab, while manually added bills appear in the Unpaid tab and require no further review. If your bills arrive by upload, there is a queue between your inbox and your payables list, and a bill sitting in it is not yet a bill anybody has agreed to.

How the A/P aging report reads your bills

The aging report is where a bill's dates come back to you, and its logic is narrower than most people assume.

Intuit states the purpose directly: aging reports "are best utilized to keep track of customer payments and vendor bills that are past due." Then the mechanics. The Current column "is anything that is not yet due. The due date is in the future of the report date and the aging is based on the due date of a transaction." The later columns follow from the same field: "1-30+ is anything past due by the number of days that passed after the due date."

Read that twice, because it means the report never looks at your bill date. A bill entered three months ago on 90 day terms is Current. A bill entered yesterday on terms that already expired is overdue. Age on the aging report is distance from the due date, not from the day you keyed the transaction.

Which makes the missing due date the failure worth checking for. Intuit is specific about it: "If there is NO due date, the transaction is considered due upon receipt and is driven by the transaction date, once a day has elapsed, the transaction will be noted as past due."

A bill saved without terms, then, is not neutral. It ages from the day it was entered and shows up as past due one day later, which is how a payables report ends up full of overdue amounts that nobody is actually late on. The fix is upstream of the report: set the terms on the vendor or on the bill so that the due date reflects the agreement.

What a bill changes the moment you save it

Saving a bill moves two numbers and leaves a third alone, and knowing which is which explains most of the confusion about switching from one purchase form to another.

Accounts payable goes up by the amount of the bill. The cost lands on the profit and loss statement, in whichever account you chose under Category details, dated the bill date. Your bank balance does not move at all, and will not until a bill payment exists.

That is the argument for using bills, and it is also the whole cost of using them. Your payables total is only as accurate as your discipline about closing them out. Every bill that was actually paid some other way, and every bill entered twice because it arrived by email and by upload, sits in accounts payable looking exactly like a real obligation.

There is a timing consequence worth planning for if you are changing how you record purchases. A business that has been recording costs as they are paid, and starts entering bills instead, has not changed what it spends. It has moved when those costs land, from the payment date to the bill date. In the month of the change, the two overlap: the bills you now enter and the payments you were already recording can both land in the same period. The totals settle down afterwards, but the first month of the switch is the one an accountant will ask about.