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How to Accurately Record Bills and Expenses

Accountancy Software How to Accurately Record Bills and Expenses

How to accurately record bills and expenses

There is a difference between a bill and an expense, it is important to keep this in mind when inputting your supplier transactions on your Quickbooks Online account.


A document to show how much you owe your supplier at a future date. For example, you might get your telephone bill at the end of the month, and it is to be paid the following month.

It is essential to enter bills to track how much you owe your supplier. It makes the process of reconciling your supplier account much easier.


An expense reports a transaction on your supplier account as paid immediately.

An example of this would be if you brought a delivery van to the garage for a new tyre. If you paid this on the spot, when entering the expense, it would record the transaction into the supplier account and would recognise the payment has been made.

How to pay outstanding bills.

There are a couple of ways to clear the outstanding balance from the supplier account when the bill has been paid.

  • Match from bank feed. If you have your bank connected with QBO. The system will recognise a payment made to the correct bill in the supplier account. You can then click “Match” this will clear that bill outstanding on your supplier account and clear this transaction from the bank feed into the reconciliation area.

Note: Always double check the transaction is being matched to the correct invoice, if there are multiple invoices for the same amount it can pick up the wrong one. If this happens click “Find other matches”

  • Make payment in supplier account. Go into your supplier account, find the bill you want to pay. Choose the option “Make a payment” and then enter all the current information. Payment date and bank account used to pay the bill. As you have entered this payment manually through your supplier account, you then want to exclude this transaction from your bank feed, so it does not appear in your reconciliation twice.

Note: If you have entered a bill, always make sure to match your payment or directly make the payment to the outstanding bill. If you expense the transaction after entering a bill it will essentially record the balance of the supplier account twice.

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