Entering Bills & Credit Memos in QuickBooks

Posted by on Feb 9, 2011 in Vendors Module | 0 comments

In Entering Bills, as a measuring gauge, use the Expense tab when recording overhead expenses such as telephone expense, hydro expense, vehicle repairs, etc. and use the Items tab if you use job costing reports, if you make client-specific purchases, or if you track overhead items such as office supplies, small tools or shop supplies.

Trainer’s Tip – If recording a purchase for items and expenses, use both tabs to enter the purchase.



From within the Vendor Centre, highlight Rogers Communications as we are going to enter a bill. From the New Transactions tab and the drop-down arrow choose Enter Bills. This could also be done from the Home page Enter Bills icon. Making sure you use the Expense tab in the Enter Bills screen, Rogers Communications should already be filled in the Vendor field but if not, just starting typing Rogers and it will appear.

Tab will fill in the Address field below and also take you to the Date field where we will use January 15, 2011. The Ref. No. field is where you key in the Invoice number 5912345678, then tab to the Amount field and enter 81.29.

The next tab takes you to the Bill due date, which has already been calculated based on the Terms that you set up for the Vendor and will show February 14, 2011. The Terms field shows Net 30. Tabbing to the Memo field we will key in some useful information like the billing period, in this case Jan. 15 to Feb. 14.

Since you set up the Account field for the Vendor, the Account (Telephone expense), Tax Code (H), Amount (72.58) and Tax fields (8.71) are already filled in for you. Tab to the Class field where we will set up a new class to track this type of expense. In the Class field, <Add New>, we will create General Overhead, OK to save it and click on Save & New from the bottom of your screen to save the bill.

The next bill is for the sub-contractor XYZ Training’s service, which will be billed to a Customer, thus we will click on the Items tab to enter the information.  Making sure that the Item tab is highlighted and open, key in the following information.

Vendor field – XYZ Training, Date – January 15, 2011, Ref. No. – R6178, Amount – 336.00, accept the Bill due and Terms field defaults, Memo field – training from Last Renovations – Jan. 7/11, and tab to the Item field where we will create a new item for the sub-contractors.

From the Item field, <Add New> enter in the following fields: Type – Service, Item Name/Number – Sub-Contract, click on the box that says this service is used in assemblies or is performed by a sub-contractor of partner. You can leave the Purchase Information field blank for now. Tab to the Cost field and use 30.00, accept the default Purch Tax Code (H),  Expense Account is Contracted Services, and leave the Preferred Vendor blank because there will be more than one.

Tab to the Sales Information side and leave the Description of Sales Information blank. Tab to the Sales Price and key in 60.00, accept the default Tax Code, and from the Income Account choose Consulting – On Site and OK to save.

In the Description field key in Training with Ethel – Last Renovations – on Jan.7. Tab to the Qty field and enter 10, the Tax and Amount field are already filled in, and from the Customer:Job field, choose Last Renovations from the drop-down box. The Bill field will automatically show a check mark, and in the Class field choose Builders.

There may also be a Time tab depending on your inintial setup, for which you can select a Time Period in which to pay. For now we will leave this blank. Click on Save & Close and Save Anyways if you get the Items not assigned class message since this has to do with the Expense tab, which you are not using.

You have now entered two types of bills in QuickBooks using the Expense and Item tabs.

To complete this exercise you are going to enter a Credit to one of the bills that you created because the equipment was not needed so a credit memo was generated.

Go to the Home page, Enter Bills, at the top of the Bill click on the Credit button, use the following: Vendor – ABC Rentals, Date – January 14, 2011, Ref.No. CM 6789, Amount Due – 100.00, tab to the Memo field and type in Equipment not required and returned. Tab to the Account field and add a new expense account called Equip rental exp, tab to the Amount field which should have 100.00 in it and Save & Close.

Next in the series – Paying Bills and handling Credits .

Remember that you can follow me on Twitter @twitter.com/QuikBooksTrainr for tips and updates also.

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