How to run the accounts payable report in Quickbooks

There are actually several reports that deal with accounts payable in Quickbooks. There is an A/P (accounts payable) aging report, which shows how old your bills are in groups of 30, 60 or 90 days and above. There is also a vendor balance report, which shows the balances you owe by vendor. However the report I use for reviewing accounts payable is the Unpaid Bills Detail report. This will give you every bill you owe in alphabetical order, along with the aging period of the bill and the due date. You select a due date to see all bills due by that date, say for instance the 1st of the month. From here you can see who you owe, how much, when it was due and make your payment decisions.

Next, how to enter recurring bills.
By Alamo Bookkeeping Associates

How to Use the Accounts Payable System in Quickbooks

The system in Quickbooks for accounts payable is called Bill Pay. It works very similar to issuing a check in Quickbooks, but instead you issue a “bill”, which is really an accounts payable. You select under the Vendors tab, “Enter Bills”. Then you select the vendor and enter the information in the fields such as the reference number, which would normally be an invoice number or maybe the period you are paying, for example August. Enter the amount due. You also have a tab for the due date. You can default to the company preference in Quickbooks, for example 10 days, or you can enter a specific due date for the bill. You can enter info in the memo field as well. Then enter the account to expense to and the amount or amounts if there is a breakdown. And that’s it. However, you need to do this for each bill you receive, which is why I advise that it creates more work than just issuing a check.
Next, how to run the accounts payable report in Quickbooks

Pros and Cons of the Accounts Payable System

I personally am not a fan of using the accounts payable system in Quickbooks. These are the reasons: First, you are having to input information twice. Once when you enter the bill and second when you issue the check. The other problem that happens is that many people start out using the accounts payable system but then when it comes time to record the check they do not go back to the accounts payable system and issue a separate check, creating a duplicate entry. Therefore I will preface the use of the accounts payable system with this; either use it all the time or don’t use it at all as it will create more problems for you. The pros of using the accounts payable system is primarily for budgeting purposes and for prioritizing payments. Once you enter all your bills you can then run a report listing the bills due and choose which ones are more vital to pay immediately.

Next. How to use the accounts payable system.

Information to put on Checks

The information you record on checks is very important for future reference. The more information you put on the check the easier it is to classify what type of expense it is. Some of the problems I have seen when recording checks has to do with not putting enough information on the check. For example, it may seem a time saver to not put the name of a vendor on a check, which you are able to do, but later if you are looking for a particular check by vendor, then you have to review all the checks to find the right one. The same goes for not recording the expense account and using the Miscellaneous Expense account. That account should be rarely used. I often see this account used, maybe if the person is not sure what kind of expense it is and plans to go back and reclassify the check later. It is better to use the account called “Suspense” instead.
The vital information is the date of the check, generally the date you wrote it, the name of the vendor, the amount, and in the memo field, what the expense was for of if there is an invoice number, that is also usually good to note.

Next, the pros and cons of using the Accounts Payable System.
By Alamo Bookkeeping Associates

Tips for Setting up Vendors

 Setting up vendors you use in a logical manner is important to prevent errors and duplication on vendors.  It is probably best that the setting up of vendors on the vendor list in Quickbooks be done by only one person. These are some of the time savers I use to prevent some problems.

Vendors are set up alphabetically in Quickbooks. If you have vendors that start with the name “The”, such as The Home Depot, shorten it to just Home Depot, because when you are looking for the name you probably won’t remember that the vendor’s name starts with “The”.

If a vendor has a ridiculously long name, shorten it to what you know you will remember.

I personally don’t set up an individual name for each gas station that a client has gone to, unless that is some kind of vital information to them (which it usually isn’t, unless they are a Trucker). I set up a vendor called “Gas Stations” and then in the memo field put the name of the gas station. This will keep the list of vendors a little shorter.  You will find that the vendor list can get very long, and some of them may be a gas station visited once and never again when traveling.

I do the same for restaurants, I set up a vendor called “Restaurants” and in the memo field put the name of the restaurant.

I also set up an account called  “Transfers”  that I use to record bank transfers done between banks within the company.  That way they all appear under one name.

Next, what information should I record on the check?

By Alamo Bookkeeping Associates.