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QuickBooks Online: Entering/Paying Vendor Bills (Accounts Payable) — Transcript

by Hector Garcia CPA · 5,975 words · 801 segments · language en · Watch on YouTube

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0:00in this video we're going to talk about
0:02recording expenses and purchases through
0:05the accounts payable workflow accounts
0:08payable eventually means that you record
0:10an expense on one day and you make the
0:12payment for that expense on an entirely
0:14different day the transaction type that
0:17we use this in QuickBooks is called
0:19bills we're going to go into the new
0:20button on the left hand side and then
0:22under vendors we're going to find and
0:25select bills when you click on bills you
0:27see the new bill screen open up and then
0:30first thing you're going to do is select
0:31the vendor that send you the bill so
0:34we're going to click on the drop- down
0:35menu and let's say this XYZ vendor is
0:37the ones that send us their bill
0:39sometimes vendor bills will say the word
0:41invoice in it because from the vendor's
0:44perspective they're invoicing you and
0:47then you're taking their invoice and
0:48you're entering it it as a bill in
0:51QuickBooks in QuickBooks when you enter
0:53invoices that's actually the account's
0:56receivable workflow and that's for you
0:57to send to your customers so in
0:59QuickBooks accounts payable it's bills
1:02if the vendor sends you a bill that has
1:04the word invoice on it you need to know
1:06that's a bill not an invoice in
1:09QuickBooks anyway the next thing you're
1:11going to do is you're going to find the
1:12build date on that document and you're
1:14going to match it in QuickBooks and then
1:16if there's a due date for that bill you
1:18can click on the drop- down menu and
1:20select the specific due date if your
1:22vendor has specific terms that they give
1:24you 15 days 30 days 60 days and you have
1:27it here on your drop down menu which you
1:29you can also create your own terms if
1:31you want to if uh the ones that come by
1:33default are not enough you can select
1:35that and the due date will change
1:38automatically now you do want to put the
1:40invoice number from the bill you got
1:42from your customer you want to put it in
1:44there so you can recognize it especially
1:46if you're going to be recording multiple
1:47bills for the same vendor you need to
1:49know which Bill you're paying then under
1:52category this is where we're going to
1:53put the expense category or the account
1:58from your chart of accounts the best
1:59represents what that bill means so let's
2:02say they're charging you for some sort
2:04of Contracting Services so let's go and
2:07see if we have contractor and or
2:09contract labor okay this is perfect so
2:11let's say we're subcontracting this
2:13company and to use their employees for
2:15some labor for our business then on the
2:18description we can put uh labor for um
2:22Miami job or something like that okay so
2:24whatever whatever uh description
2:27information that best fits that help you
2:29re remember what you're paying for that
2:31would be very useful under amount we're
2:34going to copy the amount over from uh
2:37the vendor's invoice and we're going to
2:38put that in there if you want to split
2:40the expense into multiple categories so
2:43let's say for example the $2,500 is
2:46really $2,000 in labor and $500 in
2:49materials then we will break this up and
2:51put 2,000 in one line and then let's
2:53look for a materials category or
2:57something like that there we go Supply
2:58some materials and we'll we going to put
3:00$500 on that and then we can put here
3:02materials for Miami job okay again it
3:06becomes self-explanatory because you
3:08know the name of the account is labor
3:10and the name of the account is materials
3:11but again it's up to you what kind of
3:14memo you would like to start using okay
3:16so now we have a total bill for
3:18$2,500 at this point we can either just
3:20save it we can click on the drop- down
3:22menu and do save and close save a new
3:25and there's also save and schedule
3:27payment which is whenever you have
3:29turned on the bill pay feature inside
3:32QuickBooks Online which is a different
3:35module alog together that you would have
3:36to turn on and add on if you want
3:39QuickBooks to make physical payments
3:42either via check or electronically via a
3:45to your vendors in this spe specific
3:48case we're assuming that you're going to
3:49be making your own payment arrangements
3:51you're not going to be using scheduled
3:53payments through the bill pay feature so
3:55we're going to click on Save and just
3:57save the bill or save and close and EXC
4:00out of that let's do one more example
4:02I'm GNA click on a new button on the
4:03left hand side go into build and let's
4:06say this time around I got a bill from
4:08Verizon Wireless so I'm going to click
4:10on the drop- down menu click on add new
4:12because Verizon is not in my in my list
4:15and create the vendor uh on the fly so
4:17you could always create vendors on the
4:19Fly and again you could add addresses
4:21phone numbers notes whatever you want
4:23are related to that vendor if you want
4:25to or you can just create the vendor by
4:27the vendor name and that's it then we're
4:29going to copy the information uh that we
4:31have in the bill in terms of Bill date
4:33and and um bill number all that stuff so
4:36let's say we received this bill
4:39on20
4:412024 and the due date is the 26th and
4:45the bill number will just copy the bill
4:47number from there then under category
4:49we're going to put here a phone or
4:51Communications or telephone depending on
4:54what your chart of account looks like
4:55you can have to figure out which is the
4:57chart of account that best fits that and
4:59let's say the amount from the bill is
5:02596 with 12 cents okay and that's really
5:05all you need to do one thing to add here
5:07is if you have an actual physical bill
5:10in PDF or in an image format you can
5:13actually click on attachments find the
5:15specific image that you have attach it
5:17and then that becomes part of the
5:19documentation you can attach any
5:21documents that you want into the bills
5:23for your record so then I'm going to go
5:25ahead and click on the drop down menu
5:26click save and close and we're going to
5:28be finished with that
5:30so let's talk about making a payment to
5:31this bill so there's a couple ways to
5:33make payments to the bills one we can
5:35just simply click on the new button on
5:36the left hand side and then click right
5:39there under Bill where it says pay bill
5:41that would be kind sort of Step number
5:43one we click on pay bill then we're
5:45going to get a list of all of our open
5:47bills right there on the screen then we
5:49get to choose which bank account we're
5:50paying from again this is if you're
5:53paying these bills uh separately from
5:56QuickBooks you're writing them a check
5:57or you're paying them electronically or
5:59paying them with a credit card then
6:01you're going to record the bill payment
6:03in QuickBooks we're not actually
6:05initiating the payment in from
6:07QuickBooks right now we're just
6:09mimicking what happened in the real
6:11world so I'm going to select uh the bank
6:13account that we're paying from let's
6:14assume we're paying with a check and
6:16then it will put here the date that we
6:18wrote them the check we'll put the check
6:20number this is the physical check number
6:21that we're writing them then I select
6:23the specific vendor that I'm paying with
6:24that check if I'm partially paying the
6:27vendor that's possible too I can just
6:29check select a specific partial payment
6:32so let's say I'm only going to pay this
6:34vendor $2,200 so basically I'm short
6:37paying them $300 the bill will still
6:39have $300 open uh from it because I'm
6:42only paying part of it then I'm going to
6:44click on save or I can click save and
6:46close or save and print so if you're
6:48going to print the check straight from
6:50here you can if you have printable
6:51checks you can follow uh the setup
6:54process and the printable check workflow
6:57let's do a slightly different workflow
6:58for paying bills let's say that we're
7:00going to look at the bill first so let
7:02me go into the new button then click on
7:04Bill and then I can click on the history
7:07button here where you I can see all the
7:09historical bills I'm looking at the bill
7:11specifically and I want to initiate the
7:14bill payment from the screen which you
7:15can do that as well simply by clicking
7:17on this little button on the top right
7:19that says Markus paid and when you click
7:21on Markus paid it takes you to a bill
7:23payment screen that's slightly different
7:25than the other bill payment screen but
7:27this is a a bill payment screen that
7:28already starts already by selecting the
7:31vendor for you and automatically marking
7:34the specific bill that you want to pay
7:36so it kind of does that step for you and
7:39it saves you that step so the the the
7:41earlier screen that we picked is when
7:43we're make uh going to going to choose
7:46which bills we're going to pay and
7:47possibly pay a bunch of bills and we can
7:49do a whole bunch of bill payments in
7:51batch if you want to imprint a bunch of
7:53checks and batch this specific workflow
7:55is slightly different because we're
7:56actually uh opening the bill first and
7:59then from that bill we're making that
8:01payment so let's go ahead and click on
8:02Save and close and that finishes that
8:04workflow okay let's go into the expenses
8:08tab on the left hand side and click on
8:10bills okay this bill section will
8:12actually show me all the bills I have in
8:14my system if I have any uh bills ready
8:16for review any unpaid bills any
8:19historically paid bills they're going to
8:20show up in here if I look at unpaid
8:23bills we're actually going to see the
8:25xyc vendor that we partially paid as you
8:27can see here the original bill bill
8:29amount is 2500 but it has an open
8:32balance of 300 so if I want to pay that
8:34bill later on I can do it from here or
8:37Also let's say for example the vendor
8:39calls us and says you know what you
8:41don't have to pay me the rest we made a
8:42mistake we're going to give you an
8:44adjustment to that bill now a lot of
8:46people instinctually will go open the
8:48bill and make a a physical change to the
8:50bill we actually open the bill and
8:52change it and reduce the numbers to make
8:54it go down $300 however that's not the
8:57optimal way to do it the ultimate Way
9:00the ultimate way to do it especially if
9:02you have multiple bills and multiple
9:04situations where they will be giving you
9:06credit for for to pay those bills or to
9:09or to reduce the accounts payable or the
9:11balance of those bills is to do what's
9:13called a bill credit so we're going to
9:15click on the new button and then we're
9:17going to see under bill pay bills we're
9:20going to go down under purchase orders
9:22there a specific option called vendor
9:23credit when we click on vendor credit
9:26you get a screen that looks identical as
9:28a bill but essentially what we do is we
9:30select the vendor's name then we pick
9:33the category so sort of which line items
9:35are they adjusting so we pick the the
9:37line item that made that made the most
9:39sense so let's say they're going to
9:40adjust our contract labor and we're
9:42going to put a 300 we can put a note
9:45like um
9:49vendor adjusting for errors or something
9:52like that U and then notice that I'm not
9:55putting a negative number I'm just
9:56putting a regular positive number if
9:59they issue us like a formal document for
10:01a vendor credit and there's a reference
10:04number we want to put in there we would
10:05put that reference number in there so we
10:07know what that's for and then we click
10:08on Save and close so now if we were to
10:11go back into expenses bills and we look
10:15at our open bills this bill still shows
10:17open for 300 because we have not yet
10:20applied that payment to it so to apply
10:23the payment to it and it's a bit
10:25counterintuitive is we're going to click
10:26on Mark as paid because we're not
10:28actually pay P the bill we're applying a
10:31bill credit but we're going to click a
10:33Marcus paid and immediately you're
10:35actually going to see your bill and your
10:38vendor credit right under that so as
10:39long as you see a bill and a vendor
10:41credit with a check mark right next to
10:43it and you see actual no money being
10:46exchanged under this amount all the way
10:49in the top that's zero that's basically
10:51indicating that this screen the bill
10:53payment you're actually not making a
10:55payment you're taking a previous
10:57previously set up Bill credit credit and
10:59you're using it to pay that bill off and
11:01you can if that credit is applying to
11:04multiple bills you can manually adjust
11:08which bill it gets applied to right from
11:09the screen so that's how you essentially
11:12apply the bill credit save and close and
11:15you'll be done now let me show you a
11:16slightly different workflow let's make
11:18the assumption that we have this old
11:20Bill sitting in our QuickBooks from many
11:22years ago and we're no longer going to
11:24pay it and we don't want it in our
11:27system anymore well first of all you
11:29need to find the build take take a look
11:31at it and make sure you have a keen
11:33understanding to uh what kind of account
11:36was used originally on this bill so they
11:38say we had this old bill from 2019 and
11:41it was for advertising and marketing
11:43radio ads and it was for
11:45$6,900 so now what I need to do is I
11:47need to write this off instinctively you
11:50may think Hector I'll just delete the
11:52bill of QuickBooks and I'll be done not
11:54a good idea because you're going to be
11:56uh changing your financial statements
11:58from back in 2019 so then the proper way
12:01to adjust uh a an old bill one you can
12:05use a bill credit that's possible we we
12:07could enter a bill credit for this year
12:10and apply it and you just saw that
12:12workflow but I'm going to show you one
12:13more thing which is doing it through a
12:14journal entry not necessarily the best
12:17way to do it it's more of an advanced
12:19type of concept but I want to show you
12:21regardless because it is one way you can
12:24affect accounts payable so I'm going to
12:25go to the new button and then under
12:27other I'm going to go down to journal
12:29entry in the journal entry the first
12:32thing I'm going to do is the journal
12:33date I'm going to put today's date so
12:35let's say we're in February 2024 and
12:37today is when we're recognizing that we
12:39will no longer ever going to pay that
12:41bill so the first account we're going to
12:43put is Accounts Payable right because
12:45that's that's the account that runs all
12:47your account all your bill balances and
12:49then what we're going to do is we're
12:50going to reduce that accounts payable
12:53through a debit by putting 6,900 so
12:56accounts payable gets reduced through
12:57debits increased credits again this is
12:59more of an advanced concept most of the
13:01time only really accountants deal with
13:03this so we're going to put here writing
13:06off old bill or whatever we want to put
13:09in there then under name we're going to
13:11put here our vendor's name so this one's
13:13called Old vendor and then the second
13:15entry here the balancing entry is going
13:18to be that advertising and marketing sub
13:21account radio ads that we had on the
13:24original bill so as long as we have that
13:27debit and that credit balancing each
13:28other and essentially what we're doing
13:30is we're killing that account's payable
13:32we're getting rid of that account's
13:33payable reducing that balance and in
13:35exchange we're also reducing our
13:38expenses for this year for the same
13:41dollar
13:42amount okay so that once we're done we
13:44click save and close and we successfully
13:47reduce that accounts payable if we
13:49actually go into the expenses Tab and go
13:52into vendors and specifically find our
13:54old vendor we're going to see that our
13:56old vendor has an open balance of zero
13:59like we actually do not owe that vendor
14:02any money it's right there it's very
14:03clear that we written that off however
14:06the it still shows a $6,900 overdue
14:09balance because the bill itself still
14:12shows us an open bill because we have
14:14not applied that credit to that bill so
14:17the same way that we would apply a
14:19credit memo or a vendor credit we would
14:21apply a journal entry just as well so
14:24what we need to do in this case is to go
14:26to new uh pay bills and again counter
14:29intuitive because we're actually not
14:30going to pay the bill what we're going
14:32to do is we're going to apply that bill
14:33payment so under filters I'm just going
14:35to put here a custom and I'm going to go
14:38back to all the way down to you know
14:40before 2019 so that bill shows I notice
14:43that that bill is showing right here if
14:45I select that bill a QuickBooks
14:47automatically is going to say you know
14:48what I'm going to go ahead and apply the
14:49credit now unfortunately it doesn't show
14:51the specific credit that's being applied
14:53that's sort of the the tricky part of
14:55going through this workflow to do that
14:57and this is one of the ways you can do
14:59it unfortunately if you have multiple
15:01credits and you want to pick which of
15:02the credits you want to apply QuickBooks
15:04actually just behind the scenes uses
15:06oldest one to apply it to here if you
15:09happen to have multiple potential
15:11credits that you're going to apply and
15:13you want to pick and choose specifically
15:14which one then you want to use slightly
15:17different workflow so we're going to EXC
15:18out of that and show you that one as
15:19well that way you know you kind of have
15:21all your bases covered but in order to
15:23do that I'm actually going to go down
15:25into this journal
15:26entry and I'm actually going to split
15:29this into two so I'm going to make this
15:31one uh 900 instead of uh 6,000 so we're
15:35just essentially going to do two
15:37separate credits so you can see them
15:39clearly when we go to apply them I'm
15:41going to go ahead and duplicate uh this
15:43transaction I'm going to click on copy
15:44and then I do this one for 6,000 and
15:47then 6,000 and I'll just back date this
15:49one to uh 2022 Let's see we we're
15:53actually going to see two credit
15:55spending for this particular rendor so
15:57I'm going to hit save and close and
15:59essentially when I actually go back and
16:01look at that specific bill that's still
16:03open so I'm going to go back and look at
16:05that $6 900 bill that's still open still
16:08showing overdue still showing open if I
16:10click on Mark as paid so instead of
16:12going through the pay bill workflow I'm
16:14actually going to select the specific
16:16Bill click on Mark as paid you will
16:18notice that in this bill payment screen
16:21again it's a net of Zero no money being
16:24exchanged which is perfect is what we
16:26want we actually get to see the multiple
16:28journal entries and this will work the
16:30same way with multiple uh Bill credits
16:32uh multiple journal entries that we
16:34could use and we could actually say you
16:35know what I only want to apply this $900
16:38to that bill and then do no money
16:41exchange put zero here and just make
16:43sure that's only $900 and then at that
16:45point that bill for 6,900 would now only
16:49show $6,000 open and then maybe I intend
16:52to pay a part of that later in the
16:54future that's possible too essentially
16:56I'm just trying to show you that you can
16:58pick and choose which which of the uh
17:02historical vendor credits specifically
17:05how much of the vendor credits you can
17:06use um on each so I'm actually literally
17:09just choosing how much from each one I
17:11want to pick Let's just put 6,900 up
17:14here and then I get to pick how much
17:16from each of the vendor credits or the
17:18journal entries we can use to apply to
17:20the bill so we're basically managing our
17:23old accounts payable making adjustments
17:25to them via journal entry or via a bill
17:27credit so then we click save and close
17:30and now if I go back into that uh the
17:33vendor screen and I go into my old
17:35vendor now I should show that I have uh
17:37nothing overdue everything is paid off
17:40and you get to see the entire history of
17:42the actual bill for 6900 the journal
17:44entry for 6,000 the other journal entry
17:47for 900 and then the bill uh payment
17:50that I can click on and I can see
17:51exactly the history of how those two
17:55credits were actually applied to that
17:57open bill
17:59there's one more part of the bill
18:02payment or accounts payable workflow
18:04worth looking at which is what happens
18:06if you have an open Bill and that open
18:08Bill uh gets matched through the bank
18:11feed through the downloaded transactions
18:13through the bank so let's go into
18:14transactions we're going to click on
18:16Bank transactions and then we're going
18:18to see I'm actually going to click on
18:19spend so we get to see the transactions
18:22that were spend kind of an order and
18:23then we're going to go down and find one
18:26of these uh transactions for 500 and
18:29$96.2 if you remember we actually had
18:31created a bill for that exact same
18:33dollar amount earlier so if I want to
18:35make sure that those transactions match
18:38instead of clicking on ADD and creating
18:40a new transaction in in the in the bank
18:42feed I'm going to click on where it says
18:44find match I'm going to click on find
18:46match and then I'm going to go find the
18:49bill from all my open bills in this case
18:51I happen to just have one and match it
18:54through there that way I am not going to
18:56duplicate that entry by downloading the
18:59transaction from the bank and creating
19:01it as a new entry I'm actually going to
19:02make sure that if I'm creating bills and
19:05accounts payable prior to downloading
19:07transactions from the bank that I match
19:10every single one of those transactions
19:12that already attach that that need to be
19:14attached to a bill if I'm downloading
19:16transactions that don't have any bills
19:18associated with them then I'm going to
19:19be creating those transactions in the
19:22bank feed and they come in as expenses
19:24but if I'm using an accounts payable
19:26workflow such as creating a build prior
19:29I definitely want to go through the
19:30process of matching them in Bank feed
19:33instead of creating new transactions for
19:35example you see that there's another
19:37transaction here from Verizon Wireless
19:39for
19:57444.hu you want to know let's say for
19:59example at that point you're saying
20:00Hector but how do I know what bills are
20:02outstanding and which ones are not well
20:03you can run a report that shows you all
20:05the bills you have open so you can go to
20:07Bill and then go to open open uh it's it
20:11bills unpaid unpaid so unpaid bills so
20:15you select unpaid bills and then you
20:17have a list of all the bills that are
20:19unpaid so right now in this particular
20:21QuickBook file I don't have any unpaid
20:23bills but I'll create one really quick
20:25on the fly so you can see what it looks
20:28like when that gets created in the
20:30system so I'll let me create a bill for
20:321,500 click on Save and close and now
20:35all of a sudden we go back and refresh
20:36the report and then it shows up in our
20:39list of unpaid bills so you should
20:41always run your list of unpaid bills
20:43decide which bills you're going to pay
20:45and then if you're going to go through
20:47your bank feed just make sure that there
20:49isn't a bill that you're expecting to
20:52show up on the bank feed as a payment as
20:54a recent payment so you can match it
20:56instead of creating a new transaction
20:58now the last thing I'm going to show you
20:59is using items in your bills instead of
21:02using accounts using items in your bills
21:05and also purchase orders for your bills
21:08now in order to do that I actually have
21:10to upgrade my Quickbooks I I'm actually
21:12using QuickBooks Online Simple Start for
21:14this specific example I'm going to have
21:16to upgrade my plan to plus Edition
21:20because the plus edition of QuickBooks
21:21Online is the one that has um the
21:24ability for you to put items in bills
21:28also do purchase orders and as an added
21:30bonus you can also run and manage
21:33inventory which we're not going to cover
21:35through here but if you have inventory
21:37accounts payable is a very common thing
21:39because most vendors sell your inventory
21:41on account they'll ship you the
21:43inventory and you pay them later sort of
21:45thing so I wanted to enable QuickBooks
21:48plus so I can show you both those
21:49workflows so let's start by going into
21:51the new button and then going into Bill
21:54and then you're going to notice that
21:55bills the only option you have here is
21:58to choose categories there isn't an
22:00option enabled to add items into bills
22:03but you can do that simply by adding it
22:05in the settings so I'm going to x out of
22:07that and I'm going to go into the gear
22:09menu on the top right of the screen and
22:12then I'm going to go into account and
22:13settings and then under expenses this
22:17should be under the option of bills and
22:19expenses I can click on that and one of
22:21the options you're going to see in here
22:23it says show items table on expense and
22:26purchase order forms so if I click on
22:29that now all of a sudden when I create a
22:31bill I'm going to see an item instead of
22:33an account and the other thing I want to
22:35ask add here is track expenses items by
22:38customer that's going to be crucial if
22:41the expenses that you're entering the
22:43the bills the accounts payable H has to
22:46do with an existing customer or project
22:48and maybe you even want to make these
22:50expenses potentially avilable to the
22:53customer as well so if you want to add
22:55that you make you have to make sure you
22:56have to come into the settings and turn
22:58all those things on so we went ahead and
23:01turn that on then I'm going to click on
23:02done then I'm going to go into new and
23:05create a new bill and now we're going to
23:07see a couple things slightly different
23:09but number one in the category section
23:12now it's actually labeled category
23:14details before it wasn't and now we also
23:16see a customer column where you can take
23:19an expense and Mark it avilable to the
23:21customer if I actually scroll down and
23:23click on the Little Triangle under item
23:25details and I Collapse category details
23:28then instead of entering my expenses
23:31into uh categories I'm going to enter
23:34them into items so for example I'm going
23:37to select my vendor name here so let's
23:39say this is going to be XYZ
23:41vendor and then under product and
23:43service I click on the drop- down menu
23:45and I can select the specific item from
23:47my item list now one little caveat is
23:51when you create items products and
23:53services you actually have to tell
23:54QuickBooks that this particular product
23:56and service is eligible to be used in a
24:00purchase transaction so for example I'm
24:01going to click on add new and I'm going
24:03to create a new non-inventory product
24:06and then I'm going to call it a USB
24:08cable so let's say we sell USB cables we
24:10don't track the inventory but we' have
24:12it in here notice that there's a
24:14checkbox that says I sell this product
24:16or service if that checkbox is on that
24:19means I can use that item in an invoice
24:22in a sales receipt and then if this
24:23checkbox that says I purchase these is
24:26not check on if I if I don't have that
24:29on then I will not be able to use in a
24:32bill so QuickBooks understands that
24:34you're creating the item from the bill
24:36screen so it's making the assumption
24:38that you do want to use this item for a
24:41purchase sort of scenario so let's put
24:43here under the materials expense or
24:45something like that so because um uh
24:47you're going to use this item in a sell
24:50in a purchase scenario you have to have
24:52that checkbox so if you ever create an
24:53item and you uh click on this drop down
24:56menu and you and you look at it and you
24:57say hey my item is not showing up in
24:59here why is it not showing up in there
25:01it's probably because we didn't have
25:03that little check box that says we're
25:05using this item uh in a purchase
25:07transaction so let's say this is going
25:08to be $75 so we're paying from xyc
25:12vendor we're going to put today statee
25:14we're buying a USB cable and again we
25:16did non inventory because we're not
25:18going to discuss inventory in this
25:20particular video check out the
25:21description with for all my entire
25:23playlist of QuickBooks online videos I
25:25have an entire different video that goes
25:27really deep into into the entire
25:28inventory workflow which includes some
25:31of the accounts payable but mostly the
25:32inventory portion we're focused on
25:35accounts payable for the moment and then
25:36if this particular set of wires was for
25:39a spe specific customer I can track it
25:41through that customer uh column or I can
25:44even mark it billable if I want to be
25:46reminded to invoice my customer for it
25:48so that's really optional whether you're
25:49going to mark it billable or not so
25:51essentially what we did is we enabled
25:54the ability to use both items and
25:56categories on bills so you can always do
25:59that now if we're going to do a purchase
26:01order which is basically a transaction
26:04that we do prior to the bill it's
26:06actually a non-posting transaction you
26:09don't have to create a purchase order in
26:10order to do a bill but the purchase
26:12order is nice because it reminds you
26:15that you order some stuff or maybe you
26:17order some services from a particular
26:19vendor and eventually you're going to be
26:21creating a bill with those items so
26:24we're going to go into the new button
26:25and go to purchase order notice purchase
26:28orders is showing there because we
26:30turned on QuickBooks Online plus and the
26:32purchase order looks pretty much
26:34identical to a bill the difference is it
26:36says it right there really big that it
26:38is a purchase order and let's say for
26:40this old vendor I want to do a purchase
26:42order for a couple of items so we're
26:44going to pick this um and this and then
26:46we'll you know put a dollar amounts
26:49associated with my purchase and when I
26:52finish creating the purchase order
26:54nothing's going to affect my system this
26:56is not account payable I don't owe that
26:58money I don't have an open balance uh
27:00it's not going to show up in my Banks
27:02it's not going to show up in my any of
27:04my reports because a purchase order is
27:06just a pro forat transaction but what's
27:08nice is later on when I want to receive
27:11that purchase order or when the vendor
27:14actually sends me a bill for that
27:16purchase order I can go to the new
27:18button and then click on Bill and then
27:21when I click on the drop down menu and
27:22select all vendor here on the right hand
27:25side there will be a drawer reminding me
27:28I already have a purchase order for this
27:29vendor and it's most most probable a
27:32future bill that you're going to be
27:34creating is going to come from a
27:35purchase order so all I have to do is
27:37click on ADD and I will be adding the
27:40components to that vendor now you do
27:41have to be careful because sometimes uh
27:44QuickBooks will automatically add a line
27:47based on what the last transaction was
27:49so like this 1500 was added from
27:51previous transaction so I'm going to
27:53delete that QuickBooks tries to help you
27:55by speeding up the process but um you
27:57you just have to be very very careful
27:59that if QuickBooks is adding things for
28:00you that is that what you want is that
28:03what you meant to do so that's uh so
28:05this is essentially how we how we close
28:07the circle on an open purchase order all
28:10the way through the process of creating
28:11the bill then we click on save or save
28:13and close and then you pay the bill in
28:16whichever way shape or form you need to
28:18pay it or match it with a a download a
28:21bank transaction if that's going to be
28:23your workflow the nice thing is when you
28:25look at a bill that's been linked to a
28:27purchase order we can click up here
28:28where it says link to purchase order
28:31click on that and then you can click on
28:32the purchase order and you can view the
28:34purchase order as a separate transaction
28:36that the invoice the purchase order
28:38could have one date the bill could have
28:41a different date the purchase order
28:42could have an intent that you want to
28:44buy 100 units and then maybe in the bill
28:46you only really bought 60 units not 100
28:49because maybe they shipped shipped you
28:51short or you change your mind from the
28:53moment that you did a purchase order
28:55that that the the vendor actually
28:58executed the order send you the items or
29:01sold you the services so that particular
29:04piece is more advanced I know not a lot
29:06of people are going to be using items in
29:08bills or using the purchase order
29:10workflow but if you're going to be using
29:12um inventory it's very very likely that
29:15you're going to be using the purchase
29:16order workflow anyway I hope you enjoy
29:18this video again go in the description
29:20check out all the other videos I have in
29:22this series for QuickBooks online if you
29:24like this video make sure you hit a
29:25thumbs up make sure you add comments to
29:27ask what kind of content you like to see
29:30in the future and subscribe to the
29:31channel so you can be notified next time
29:33I create another video like this thank
29:35you and I'll see you in the next one

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