Apply Payment Bill in QuickBooks Accounting Software

QuickBooks accounting software is a multi-purpose financial tool that offers numerous functions and features. One such feature that is often underestimated and underutilized is the bill recording and payment function. This feature allows businesses to keep track of liabilities owed to vendors, including the amount due and the due date. It also provides the option to print checks and make online bill payments.

The Importance of Bill Recording and Payment

Despite its many advantages, the main reason for the popularity of the bill recording and payment feature is the time it saves in maintaining this aspect of the business. Users only need to record the check made for bill payment at the time of its due date, which is why this feature is often overlooked by many small businesses. They opt to let this feature go altogether due to the time and effort required to keep it up to date, as they can simply enter the amount as an expense in the Enter Bill screen at the end of the month. Most companies choose to use ACH with their vendors and only enter the amount as an expense into QuickBooks when the bank is impacted by the same.

However, businesses like retailers and restaurants that are accountable to numerous vendors with bills due at different times and amounts can greatly benefit from this feature. These businesses have a multitude of bills from different vendors with different due dates and varying amounts to be paid at monthly intervals. QuickBooks offers them the additional feature of a monthly remittance statement that provides a clear picture of bills paid and due for any particular month, which can be shared with vendors to clear any outstanding payments.

How QuickBooks Tackles Bills

The main accounting process followed when recording and paying bills in QuickBooks is illustrated below:

• When a bill is recorded in the books, it results in an increase in both the expense and the Accounts Payable (liability) account.
• When the bill is paid, the Accounts Payable account decreases, and either the cash account decreases or the liability of the bill moves to a credit card.

How to Record Bills in QuickBooks

When vendors provide bills either in hard copy form or digital format via website or email, users need to enter certain details to avoid confusion at the later stage of payment. Some of the required details include:

• Date: The date on which the bill was generated by the vendor.
• Vendor details: Name, contact details, and address, which should be double-checked to ensure correct information is entered.
• Invoice number.
• Due Amount: The total amount that needs to be paid based on the services provided.
• Memo: Note down the service or product for which the bill was created and needs to be paid by the company.
• Terms and Conditions of the Invoice: Details like the number of days provided for making full and final payment, which could be Net 30 or due on receipt.

The need for entering bills into QuickBooks has been debated for some time, as the process can be time-consuming and not necessary for some companies. However, companies that incur multiple bills from numerous vendors can benefit from entering bill data into QuickBooks, as it allows them to keep track of Accounts Payable and monitor vendors based on the credit issued. Furthermore, users can get a complete picture of their business's liabilities and predict cash flow within the company.

Bill Payment in QuickBooks

To make bill payment easier for users, QuickBooks offers a Bill Pay window where users can select and click on the bills they need to pay and record the payment through different modes. This allows users to keep track of payments made through credit card (which falls under liability) or cash and debit card payments (which fall under assets).

Printing Checks with QuickBooks

One payment option is to print checks through QuickBooks, which has the added benefit of automatically recording the check within the software with the correct date. In the Pay Bills window, users can select and click on as many bills as needed to be paid, as QuickBooks can easily combine different bills from the same vendor into a single check. To print checks, users should follow these steps:

1. Enter the date of the check.
2. Select the mode for the check.
3. Choose the mode as "to be Printed".
4. Select the account from which the check will be drawn.
5. Click on the "Pay Selected Bills" tab located in the bottom right side of the screen.
6. Follow the instructions prompted on the screen.

Bill Payment Made Outside of QuickBooks

When users complete bill payments outside of QuickBooks, either by providing a handwritten check to the vendor, using a credit card, or having an automatic bill payment contract with the vendor, the transaction needs to be manually recorded in QuickBooks to balance the books and match bank transactions and data.

For example, if a $100 bill from L&T is recorded in QuickBooks and then paid via credit card, the process of recording the transaction in the software will be the same as illustrated above:

1. Click on the paid bill from the list in the Pay Bills window.
2. Enter the date of the bill payment.
3. In the "Payment" field located in the bottom left side of the screen, select "Credit Card".
4. Select the credit card used for the payment from the list of saved cards.
5. Complete the transaction by clicking "Pay Selected Bills".

If the bill is paid manually by a handwritten check, the process for printing a check should be followed, with the exception that it will be accepted under the "Assign Check Number" option.

The Benefits of Using QuickBooks for Bill Payment

The bill payment option within QuickBooks has made tracking payments to vendors much simpler for bookkeepers and accountants, as the result is 99.9% accurate and automatic. Although most vendors nowadays offer online bill payment options to their customers, there are still many who don't provide this convenience. Another hassle is remembering website links, usernames, and passwords, which can take about the same amount of time as recording and printing checks in bulk, without the option of automatically syncing with QuickBooks.

The steps illustrated above ensure that users can easily record bill payments to their vendors for multiple bills at once without any hassle. However, if any issues arise while following these steps, users can reach out to the QuickBooks expert team for assistance. If there are any problems connecting with the QuickBooks team, users can also contact us through the live chat option on our website.

Frequently Asked Questions

Q: Can I pay multiple bills to the same vendor at once in QuickBooks?
A: Yes, QuickBooks allows you to select and pay multiple bills from the same vendor in a single check.

Q: What if I pay a bill outside of QuickBooks?
A: If you pay a bill outside of QuickBooks, either by handwritten check, credit card, or automatic payment, you'll need to manually record the transaction in QuickBooks to keep your books balanced and accurate.

Q: Can I print checks directly from QuickBooks?
A: Yes, QuickBooks offers the option to print checks, which automatically records the check in the software with the correct date.

Q: What details do I need to enter when recording a bill in QuickBooks?
A: When recording a bill in QuickBooks, you should enter the date, vendor details, invoice number, due amount, memo, and terms and conditions of the invoice.

Q: How can I get help if I have trouble using the bill payment feature in QuickBooks?
A: If you encounter any issues while using the bill payment feature in QuickBooks, you can reach out to the QuickBooks expert team for assistance or contact us through the live chat option on our website.