How to Apply a Payment to a Bill in QuickBooks

Apply Payment Bill QuickBooks accounting software is multi-purpose financial software which accord numerous functions and features. However, one such feature which is massively underestimated and used is the bill recording and payment. This function of the software helps the business to keep an eye on the liabilities incurred by the company to their vendors, the amount due and the due date along with option of printing checks and making online bill payment for the same.

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Despite its many advantages, the main reason for its popularity is the time taken to maintain this aspect of the business. As the user just needs to record the check made for bill payment at time of its due date, this feature is often overlooked by many. Most of the small businesses opt to let this feature go altogether due to its time taken function as for them the effort and time put in to keep this part on track when the same can be done at the end of the month in the Enter Bill screen. Most of the companies opt to put up with ACH with their vendors and only enter the amount as expense into QuickBooks when the bank is impacted by the same.

Keeping aside this time-consuming factor, businesses like retailers and restaurants that are accountable to loads of vendors incurring bills due at different time and amount, are actually quite benefitted with this feature of QuickBooks. These businesses have multitude of bills from different vendors having different due dates, with different amount to be paid at an interval of a month. The software offers them another feature of monthly statement of remittance having clear picture of bills paid and due for any particular month that can be shared with vendor to clear the undue payments.

How QuickBooks tackles bills?

Main accounting process followed while typing in and making payment of the bill is illustrated below:

• When the bill is recorded in the books, it has reflex reaction as increase in expense as well as the Accounts payable (liability) account.
• On the other hand when the bill is paid the affect on accounts payable is that it decreases and cash account also decreases, or the liability of the bill moves on to credit card

How to Record Bills?

When the vendors provide bills either in hard copy form or digital format via website or email id, the user needs to type in certain details so as to avoid confusion at later stage of payment of the bills. Some of these details required are:

• Date (the one on which the bill was generated by the vendor).
• Vendor details (Name, Contact details along with address which should be checked twice to ensure correct information is typed in).
• Number of the Invoice.
• Due Amount (As per the services garnered, the total amount that needs to be paid).
• 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 days provided for making full and final payment, which could be Net 30 or due on receipt).

The need for entering the bills in the software has been in debates for quite some time, as the process is quite time exhausting and not really needed by some of the companies. However, on the other hand there are companies who incur multiple numbers of bills from myriad number of vendors, for whom entering bill data into QuickBooks can work in their favor as they will be able to keep a check on the Accounts payable and track vendors as per the credit issued. Furthermore, users can garner the final picture of their business regarding the liabilities owed and also predict the flow of cash within the company.

Bill Payment

In order to aid users to make bill payment with ease, QuickBooks offers Bill Pay window through which they can select and click on the bill they require to pay and record the same through different modes of payment which allows users to keep an eye on the payments through credit card (that comes under liability) pr cash and debit card payments (that comes under assets)

Printing Checks with QuickBooks

One option of payment is by printing checks through QuickBooks that has the additional benefit of recording the check within the software along with correct date automatically. The window labeled pay Bills user can select and click as many bills needed to be paid as the user likes, since the software easily clubs different bills of same vendor under one single check. All the user needs to do is follow steps written below:

• Type in the date of the check
• Select the mode for the check
• The mode selected should be – to be Printed
• Next from the list select the account from which the check will be drawn
• Now click on the tab labeled ‘Pay Selected Bills’ located in the right side and bottom half of the screen
• Next follow the instructions prompted on the screen. 

Bill Payment made beyond QuickBooks

When the users complete bill payment outside of QuickBooks either by providing hand drawn check to the vendor method, through credit card or have a contract of automatic bill payment on regular basis with the vendor, the case is said to be bill payment made beyond QuickBooks. Under this method user needs to repeat the transaction manually within QuickBooks in order to balance the books and match with Bank transactions and data. Suppose the bill rendered to L&T for $100 is recorded in QuickBooks and then payment is made via credit card the process of making transaction recorded in the software will be the same as illustrated above:

1. Click on the bill that is paid from the list under Pay Bills Window.
2. Type in the date of the Bill Payment
3. In the field labeled ‘Payment’ located in the left side bottom half of the screen, select ‘Credit Card’ option.
4. From the number of cards saved select the option through which payment was made.
5. End the transaction by clicking on Pay Selected Bills.

In case the bill is paid manually by the hand drawn check, the process followed for print a check will be followed here with the exception that it will be accepted under ‘Assign Check Number’ option.

Bill Payment option within QuickBooks has made the tracking of payments to vendors quite simple for bookkeepers and accountants as the result is 99.9% authentic and accurate with added benefit of being automatic as well. Although, most of the vendors, nowadays, offer the option of online bill payment to their customers, however there are many vendors who don’t provide same luxury. Another hassle is remembering the website link and name as well as user credentials which take about the same time taken to record and print checks in bulk, without the option of syncing with QuickBooks automatically.

The above illustrated steps ensure that the user can easily record bill payments to their vendor for more than one bill at a time without any hassle. However, for any issue in following the steps QuickBooks expert team can be approached. Moreover, if there is any issue in connecting with the team of QuickBooks for the same user can connect with us at live chat option on our website.