QuickBooks Training - How to Track Accounts Payable in QuickBooks

QuickBooks is financial management software from Intuit and it dominates the small business market due to its ease of use and low price point. However, many small businesses purchase the software and don't get the proper training. This causes them to miss out on key features that could really help them run their business more effectively.

One of the most useful features of QuickBooks is the ability to track bills from vendors using Accounts Payable. The software enables you to enter bills when you receive them from your vendors and suppliers, track them using a due date, and then pay the bills when the time is right. There are various reports that can be used along the way to manage the bills and your businesses cash flow.

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When you receive a bill from a vendor (it doesn't matter if the bill is for the telephone or for merchandise that you resell, all bills are treated the same) you enter it into QuickBooks using the "Enter Bills" screen. It can be accessed from the Vendors menu. You then fill out the form on the screen to mimic what you see on the paper bill that is in your hand. You enter the vendor name, the bill date, invoice number, the dollar amount and due date. All of this information comes directly from the bill.

QuickBooks Training - How to Track Accounts Payable in QuickBooks

Then at the bottom of the screen you will need to select either an account or an item. If the bill is for a normal operating expense such as rent or telephone, you will choose an expense type account called "Rent Expense" or "Telephone Expense" or something like that. Sometimes you won't know what account to choose. In this case you can choose a generic account such as "Ask My Accountant". Then when your accountant reviews your QuickBooks he or she can go over these expenses with you or the business owner to determine what account they should be posted to.

If you are purchasing items that you are in the business of selling, then you will choose that item name at the bottom of the "Enter Bills" screen. If it is an inventory type item then this bill will cause the quantities to increase.

Once you click "Save & Close" or "Save & New", the bill is entered into the system. You can view all unpaid bills by looking at a report called "Unpaid Bills Detail". It can be found under the "Reports" menu, in the "Vendors & Payables" section. This report will list each vendor that has an unpaid bill and will show you some of the details of each bill.

When it is time to pay a bill you go to the "Pay Bills" screen, which can be accessed from the "Vendors" menu. You will be presented with a list of all unpaid bills. You can sort and filter the list various ways to see just the items that you are interested in paying.

Once you find the particular bill(s) that you want to pay, simply click in the left-hand column next to the bill and it will place a checkmark there. That bill is now selected for payment. You can select multiple bills to be paid in the same session.

Toward the bottom of the "Pay Bills" screen are several important options. You must make sure that they proper bank account is selected and that the date is correct. Once everything is in order, click the "Pay Selected Bills" button and the payments will be recorded. You will then have the option of selecting more bills or to go on to print checks.

Printing checks is a fairly straightforward process as you simply follow the prompts that the software presents to you.

Using these Accounts Payable features allows you to correctly apply expenses to the proper periods as you enter bills when they are received, regardless of when they are paid. It allows you to see how much cash is needed to pay all the bills that are coming due this week and you can observe the aging of all the bills to see how far behind you might be. All of this information can be used to better run your business.

QuickBooks Training - How to Track Accounts Payable in QuickBooks

Mike Debyah is a CPA and Advanced Certified QuickBooks ProAdvisor. He produces QuickBooks Training videos and distributes them on his website and as a podcast, both of which are called "Full Contact Accounting".

Mike teaches QuickBooks, accounting and bookkeeping through one-on-one sessions, live classroom settings and online.

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