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A Best Practice Review: Enter a bill or just write a check

I recommend doing both. First enter a bill and then write a check to pay the bill. As with many things in QuickBooks you can accomplish the same task a variety of ways. There is a best practice though, and per usual, it calls for using QuickBooks as it was designed – one form at a time.

If you have received a bill from a vendor don’t skip the step of entering it into QuickBooks even if you intend to pay it immediately and before it is due. Take 20 seconds and enter the bill taking care to date the bill in QuickBooks as it is dated on the bill not accepting the default of today’s date as you enter the transaction.

[Side note: There are times when you don't want to use the date on the bill. If the bill is dated January 3rd, but clearly states it is for services provided in December, date the bill in December.]

There are two primary reasons to enter the bill first, instead of just writing a check.

First, QuickBooks will track when the bill is due. When you enter the bill you enter in the due date and the payment terms (e.g., net 30). QuickBooks will then produce of report of what bills are coming due. This helps you keep hold of your cash longer while at the same time ensuring your bills aren’t late.

Secondly, entering the bill ensures you are recording your expenses into the right period. If you receive a bill for services performed in June, it is probably July by the time you receive the bill. If you just write a check, the expense is recorded into the books with a July date, when the date should really be June. Entering a bill allows the bill to be dated June and the subsequent check to be dated July keeping both your cash and accrual reports accurate.

Some of my other favorite bill best practices include:

If you need help reviewing your AP process to ensure best practices are being used and that it is operated as efficiently as possible drop us a line.

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