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Bills, Expenses & AP in QBO
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Bills, Expenses & AP in QBO

Enter bills, record expenses, pay vendors, and keep the AP aging clean in QuickBooks.
12 min read+150 XP on completionCert: QuickBooks Online
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Bills, Expenses & AP in QBO

Bill vs. Expense -- Critical Distinction

SituationUse
Vendor invoice received, pay later**Bill**
Paid immediately (card, cash, bank)**Expense**
Credit card statement item**Expense** (or import via bank feed)
Employee reimbursement**Expense**

Using a Bill when it's an Expense (or vice versa) creates phantom AP balances.

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Entering a Bill

+ New > Bill
  > Vendor (select or create)
  > Bill Date and Due Date
  > Category or Item details
  > Amount
  > Attach vendor invoice PDF
  > Save

Search the vendor's existing bills first -- never enter a duplicate invoice number.

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Paying Bills

+ New > Pay Bills
  > Check the bill(s) to pay
  > Payment Date and Method
  > Bank Account to pay from
  > Save and Print (for checks) or Save (for ACH)

Best practice: Pay bills in batches -- weekly on the same day. Consistent cash flow management.

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Recording Expenses

+ New > Expense
  > Payee (vendor or individual)
  > Payment Account (bank, credit card)
  > Payment Date
  > Category: select the expense account
  > Amount
  > Attach receipt
  > Save

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Vendor Credits

When a vendor issues a credit (return, refund, overbilling):

+ New > Vendor Credit
  > Vendor, Amount, Reason
  > Save

Apply it when paying bills: Pay Bills > the credit will show next to the vendor's open bills.

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AP Aging Report

Reports > What You Owe > Accounts Payable Aging Summary

Bills 31--60 days: escalate. Bills 61+ days: urgent. Never let bills hit 90+ without documentation.

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