How to Set up Accounts Payable in QuickBooks

setup accounts payable in quickbooks

Accounts Payable account is maintained by businesses all over the world in order to maintain a detailed report regarding all the outstanding bills pertaining to the business. The bills basically demonstrate all the money owed to vendors for purchasing their goods and services on credit terms. Authentic details of Accounts Payable need to be recorded accurately to avoid any financial miscalculation in the future leading incorrect tax payments and consequent tax fine. Following is the basic structure that is usually employed by businesses to maintain an Accounts Payable record in tandem with QuickBooks Desktop software.

Workflow : Create Purchase Orders -> Retrieve Stock -> Enter Bills -> Make Bill Payments – Under this the user basically creates an order of purchase for all the products and services bought, retrieves the ordered stock, records the bill against it and lastly pays the bills.

  • Create Purchase Order
    • Go to menu bar and locate the Vendors tab followed by selecting the Create Purchase Orders tab.
    • From the drop down menu of Vendors, either select an existing one or create a new vendor form as per the vendor history with the business.
    • Fill in the line item area by entering the items you’re ordering.
    • Click on the Save & Close tabs.
  • Receives Inventory
    • Receives Inventory with Bill
      • From the Home screen, select the ‘Receive Inventory’ drop-down and then followed by ‘Receive Inventory with a bill’ option.
      • On the Enter Bills window that appears:
        • From the dropdown, choose the vendor name.
        • Select the option ‘Yes’ against the Open POs Exist dialogue box.
        • In the new screen labeled Open Purchase Orders, click the accurate Purchase Order option followed by OK tab.
        • Review information on the Bill.Note that except for the Memo field, any fields that were filled in on the PO are carried over to the Bill.
        • Click on the ‘Save & Close’ tabs.
        • Proceed to lat step in order to pay the bills
      • Receives Inventory without Bill
        • From the Home screen, select the ‘Receive Inventory’ drop-down and then followed by ‘Receive Inventory without a bill’ option.
        • On the Item receipt window:
          • From the dropdown, choose the vendor name.
          • Select the option ‘Yes’ against the Open POs Exist dialogue box.
          • In the new screen labeled Open Purchase Orders, click the accurate Purchase Order option followed by OK tab.
          • Review information on the Item Receipt. Note that except for the Memofield, any fields that were filled in on the PO are carried over to the Item Receipt.
          • Click on the ‘Save & Close’ tabs.
          • Proceed to next step in order to enter bill against the stock items.
        • Enters Bills against Stock Items
        • From the main screen, select the option called ‘Enter Bills against Inventory’.
        • In the new screen labeled ‘Select Item Receipt window’:
          • From the drop down menu of the option ‘Vendor’, click on the appropriate name of the vendor.
          • Checkmark the box placed against option ‘Use item receipt data for the bill date’ to ensure original date is used.
          • Select the Item Receipt that is in tandem with the bill.
          • Click on Ok. QuickBooks itself converts the receipt of the item into the bill.
        • Bill Payment
          • Locate Vendors tab from the menu bar followed by Pay Bills option
          • Select the appropriate Accounts Payable Account as per the vendor’s details.
          • Click on the bills user wishes to pay.
          • Set any discount or credit that user wants to apply to the bills.
          • Click on appropriate payment date and type.
            • Check
            • Credit card
            • Cash, debit card, ATM card, PayPal (US only) or EFT (US only)
            • Direct Deposit (applies to US only)
            • Online Bank Payment (applies to US only)
          • Select the option Pay Selected Bills.
          • In the new screen labeled Payment summary select the tab called ‘Done’ once the user is finished with paying bills Click on the tab ‘Pay More Bills’ to go back to the Pay Bills screen. 

Workflow 2: Bill -> Payment – This process is followed in businesses where purchase order does not need to be created and only requires working with entering of the bills and consequent payment.

  • Enter Bills
    • On the Home screen, click Enter Bills.
    • Click on the selected vendor.
    • Click on the correct date.
    • Select the correct option:
      • Expense
      • Items
    • Select either the expense account or the item one.
    • Enter in the required amount.
    • If the user is tracking billable expenses, then the option customer job should be selected followed by clicking on the check box against the field ‘Billable’ option.
    • Click on the save and close tab
  • Payment of Bills
    • Locate Vendors tab from the menu bar followed by Pay Bills option
    • Select the appropriate Accounts Payable Account as per the vendor’s details.
    • Click on the bills user wishes to pay.
    • Set any discount or credit that user wants to apply to the bills.
    • Click on appropriate payment date and type.
    • Check
    • Credit card
    • Cash, debit card, ATM card, PayPal (US only) or EFT (US only)
    • Direct Deposit (applies to US only)
    • Online Bank Payment (applies to US only)
    • Select the option Pay Selected Bills.
    • In the new screen labeled Payment summary select the tab called ‘Done’ once the user is finished with paying bills Click on the tab ‘Pay More Bills’ to go back to the Pay Bills screen.

The above illustrated steps ensure that the user can easily add and setup the account payable record with required details within the system without any hassle, in right time and correct amount. In the situation user still faces the same problems; it is recommended to approach the QuickBooks experts who are extremely knowledgeable regarding all things QuickBooks set up by Intuit. Moreover, if there is any issue in connecting with the team of QuickBooks for the same user can connect with us at our toll free number +18554815335 and live chat option on our website – Quickbooksnumber.support.

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