The Accounts Payable transactions are those that you owe to others like vendors or suppliers. The transactions are for the product and services that they have to sell and you bought it so, they invoiced you for that.
When the businesses invoiced you for their products and services then you have to record those transactions. To record it you must know how to record accounts payable transactions as these invoices are all gone in the Accounts Payable of QuickBooks.
Steps to Record Accounts Payable Transactions in Your QuickBooks Account
There are 2 ways to record accounts payable transactions into your QuickBooks account. You have to follow any one way that you would like to follow. So the 2 ways are explained below:
Method 1: Record Bill using the Enter Bills Window
In this, you have to record the bills by entering the bill into the window or in the accounts payable register. After entering the bills, you can also track the bills with the help of Expense and Item. Here are the steps that help you to enter the bills into your QuickBooks account:
1. Firstly, select the option Enter Bills
On your homepage of QuickBooks, go to the Vendors section. Then you have to click on the enter bills icon. The Enter Bills window opens up where you can see that in the upper half window it looks like a check. The bill asks for all the information that you have to enter in the check to pay the bill.
There is an option above the bill that you have to check that it should be selected as Bill. If not then click on the Bill option.
2. Choose the Vendor’s Name You are Paying to
Check that the vendor whom you want to pay this bill is on your vendors list or not. If yes, then click on the drop-down arrow and select the vendor. If the vendor is not on the list then you have to Quick Add or Set Up the information about the vendor. The information that you have to provide is the address, payment terms, credit limit and others.
3. You have to Choose the Terms of Payments that Explains When the Bill is Due
For this, you have to go to the Terms line and then open the drop-down menu. After that, select the payment terms.
4. Mention the Reference Number of Vendor (optional)
If you provide the reference number of the vendor for the bill then it prints on the voucher. It is also part of the printed check. It is probably the invoice number or the account number that is used and it is not a must. So it is up to you whether you want to mention it or not.
5. Enter the Memo for Bill Description (optional)
You are required to enter the note in the text box of the memo. This note is going to show on the accounts payable register into your QuickBooks account. It is also an optional field that is totally up to you whether you want to fill it or not.
6. You have to go to the Account Column in the Expense tab and then provide the Expense Account Name
The expense account name that you want to enter is already on the list of Chart of Accounts. Then you have to click on the drop-down arrow to check the list of accounts. Locate the account name by scrolling the list and then click on the account name to which the bill belongs to.
In case if the account is not added into the Chart of Accounts then you are required to create a new expense account category for this bill. Click on the Add New option after that a dialog box opens up. In this, fill all the information that is required and then click on the OK button.
7. After that, Go to the Amount column and You can Change the Amount if Required
If you are going to split the bill in a few different accounts then just make sure you have mentioned the amount in the Amount column to the total of that bill.
8. You have to Explain in Words into the Memo Column (Optional)
9. Assign the Expense to the Customer: Job (Optional)
For reimbursement of these expenses or tracking the expenses by job; you have to mention the customer who reimburse it to you. If required then you have to enter the amount for each account.
10. Assign the Expense to a Class (Optional)
This means that you can easily track your expenses by class and also make entries in the class column. To set up QuickBooks to track expenses by class you have to click on the edit menu option. Then select the preferences option. In the preferences window, click on the accounting icon and then click on the company preferences tab. Now select the checkbox of Use Class Tracking.
11. Click on the Item Tab to Record the Items Represented by the Bill
In the items tab, you have to enter the items that are purchased by you and also the prices that you have paid for that item.
12. Now Go to the Item Column and then Enter the Name of the Item
In the item column, there is a drop-down arrow that you have to click on. Then check for the list of items displayed to you and make sure that it displays the item accurately. After entering the items, check that it shows your purchase item with cost and their quantities. If the item is not in the list then you have to create the new item and for that you have to fill a new item window.
13. In the Items Tab, You have Fill the Remaining Rows of Items
Here, you can mention all the items that you are purchasing. After entering them, double check that your items are shown properly with the quantities and their costs. If you want to total the items then you have to click on the Recalculate button.
14. In the End, Save the Bill
Click on the Save and Close button if you are done and you don’t have any new bill to enter. Click on Save and New button if you want to enter another bill.
Method 2: Alternate or Fast Way to Enter Your Bills into QuickBooks
This is the other way that you can use to enter the bills directly into your QuickBooks accounts payable register. This is the fastest way to record accounts payable transactions. But it may be difficult to track the expenses and items using this method. The steps to implement the fastest way to enter your bills are as follows:
1. In QuickBooks, Click on the List menu option then Select the option Chart of Accounts. You can also click on the Chart of Accounts I can directly from the Homepage of QuickBooks.
It open the Chart of Accounts into your QuickBooks software
2. Now Open the Accounts Payable Account
When the Chart of Accounts window opens up on your software then you have to click on the Accounts Payable from the list of accounts. Now the window of accounts payable register is open up and you are able to see the cursor in the new line where you have to enter the next bill.
3. Enter the Information for the Your Bill
Mention all the information same that you would like to fill in the Enter Bills window. In the text box of vendor, you have to click on the drop-down arrow and then choose the name from the list of vendors displayed to you. If the name of the vendor you entered is not recognized by the QuickBooks then it shows you when it is not found. so you have to provide the information about this never under your QuickBooks software.
4. When you are Done Selling all the Information then Click on the Record Button
The Record button is available at the end of the information that you fill. There is another button named restore also available with this record button. The restore button helps you to clear all the information that you have written in the form. You can use the restore button when you want to start all over again with the transaction that you are going to enter. You have to click on the restore button just before the record button.
What are the other Accounts Payable Pointers in QuickBooks?
There are some additional things that you must know about the Accounts Payable in QuickBooks. These points are as follows:
1. All the Debits are Not for the Expense: There are many amounts that are owed from accounts payable for business expenses. You also have to record the purchase of your assets like equipment. In this case it won’t go to the expense account but the asset account.
2. The Method of Account Payable is Accurate: It is one of the best ways to record the bills as it records the expenses when they occur. It shows the mirror image of your accounts receivable. The tracking is done to the amount you owe to the vendors and suppliers. The expenses are also recognized when they happen instead of when you pay them.
In conclusion, there are 2 ways to record accounts payable transactions into your QuickBooks account. Go with any of the ways to record your bills into QuickBooks accounts payable. In case you are having any issues or problems then get in touch with the Dancing Numbers team who is here to help you all the time. You can connect with team members whenever required and get best assistance for all your queries.
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When you Record Accounts Payable Transactions then where it Appears in the Balance Sheet of QuickBooks?
The Accounts Payable appears on the liability side into your balance sheet. In liabilities, it appears in the category of current liabilities. As the Accounts payable amount is that you owe from other businesses like suppliers or vendors.
What are Some Examples of Accounts Payable for Which you have to Record the Accounts Payable Transactions?
The accounts payable examples are:
How Accounts Payable refers to Short Term Debts that you have to Record Accounts Payable Transactions?
The Accounts Payable refers to the short-term debts that are owed by your business. You have to pay these debts within one year. These amounts are not expenses; they are debts as the funds won’t reach the income statement. So, these appear as current liabilities on the balance sheet instead of accounts payable.