QuickBooks gives you 2 options for how to write checks for bills you get from vendors. The fast way is to only enter check transactions, put in all the information, and print the checks. While this can save you some time, there are some advantages to first entering bills, then making payments against the bills. If you generate financial reports using the accrual basis of accounting, the second method allows you to account for bills that come in after your fiscal year closes and need to be accrued. It also allows you to monitor unpaid bills from within QuickBooks, as well as entering and applying credit memos. If you pay bills on a fixed schedule, such as weekly or on net 30 terms, entering bills as they come in will let you monitor expenses and plan your cash flow. I’ll walk through how to use both methods here, as well as how to enter credit and debit card transactions, or direct debits to your bank account.

Entering Bills: When you get bills from vendors, you’ll need to know a few details to enter them in QuickBooks:

  • Vendor – make sure you have the correct address information
  • Date – this should be the invoice date, when it was sent by the vendor
  • Invoice #
  • Amount Due
  • Terms – this is how long the vendor gives you to pay the bills, e.g. due on receipt or net 30.
  • Memo – this is the product or service you’re paying for
  • Category – this is the expense you’re charging or asset you’re recording. You can choose from anything in your chart of accounts.

In the menu on the left side of the screen, click on Expenditures, and go to the Expenditure screen. Click on the New Transaction menu and click Bill. Alternatively, on the Vendor screen, open a vendor’s record and click on New Transaction – Bill. If you got a credit memo from a vendor, click New Transaction – Vendor Credit.

Pay Bills: When you’re ready to cut checks, go to either the Expenditures or Vendor screen and click Pay Bills. This is next to the New Transaction or New Vendor button. If you prepared 1099s recently, that button will show up; click the down arrow next to it and choose the option to Pay Bills. You’ll see all the unpaid bills you’ve entered and can choose which you’d like to pay. If a vendor has outstanding credit memos, QuickBooks will automatically apply these when you select bills to that vendor; you can choose not to use the credit memo if you prefer not to. If you have multiple bills from a single vendor, QuickBooks will pay them in a single check.

If you prefer to pay a single bill, you can navigate to the Vendors screen, and either click on the Open Bills tab at the top, or open the vendor you’re paying, and click Make Payment next to the bill you’re paying. When you’re in the payment screen, you’ll have the option to include other unpaid bills from that vendor from a list that will pop up on the right side of the screen.

Check Transactions: From the Expenditure screen, or a vendor’s record in the vendor screen, you can also choose Check from the New Transaction menu. This will let you write a check to a vendor without first entering a bill. You’ll enter all the same information as if you’re entering a bill, except for payment terms, but it’s a one-step process instead of two. When you put in the vendor name, if you did enter bills previously, they’ll show up in a list on the right side of the screen, and you can choose to add them to the check you’re writing.

Expenditure Transactions: If you use a credit or debit card, or make payments online that are charged to your bank account, you can enter them as Expenditure transactions. From the Expenditure screen or vendor record, go to the New Transaction menu and choose Expenditure. Choose the credit card or bank account you used to pay the expense, and enter the relevant information.