now that our vendors are set up we can now start entering bills from vendors for services that we
have received when QuickBooks uses the word bill QuickBooks means invoice that we receive
from a vendor you probably remember in the customer section the invoice was a document
that we sent to a customer to ask the customer for something that they promised to pay a bill
is the same thing except when we use QuickBooks we use the word bill when the vendor sends the
document to us to ask us to pay for something we owe the vendor so the word bill and the word
invoice mean the same thing but in QuickBooks it's called a bill if you received it from a
vendor it's called an invoice if you send it to a customer it's very easy to record a bill
that you receive from a vendor the window is very simple and it will be demonstrated in a
moment but let's think about what happens in your QuickBooks records when you enter a bill
and record the information from a bill that you receive from a vendor well as soon as you
record a bill like you record any transaction the chart of accounts and the general ledger
will be updated and that will reflect on the trial balance but from the very same
bill the vendor records which are separate from the general ledger will also be updated
here's the example of our first bill imagine on April 13th we receive the electric bill from con
Edison imagine it's a thousand dollars and it's bill number six one six one right now electric
expense is not listed in the trial balance even though electric expense is in the chart
of accounts accounts payable is also not listed yet in our trial balance but accounts payable
is in our chart of accounts after we record this first electric bill for $1000 electric
expense should show up on the trial balance for the first time as $1,000 and accounts payable
should also show up on the trial balance for the very first time for $1,000 that would be how that
bill would affect the general ledger and the chart of accounts remember that same bill also affects
the vendor records just like the customers have a customer balance detail the vendors have a vendor
balance detail this report shows the amount we owe to each individual vendor so if we record that
electric bill that electric bill should show up as $1,000 that we owe specifically to con Edison
all we have to do is record the bill once and the vendor records here and the general ledger
trial balance will change from the same bill let's take a look before we record the bill let's take a
look at the trial balance and you remember there are many numbers in the trial balance that have
accumulated from the previous videos that we learned but there is no accounts payable right
now and there is no electric expense right now after we record this bill that will change if
you wish to record a if you wish to enter a bill from a vendor click vendor and your bill and of
course the enter bill window opens up the date of the bill is April 13 the vendor is con Edison the
reference number on the bill is 6 1 6 1 and the amount is $1,000 now con Edison is a new vendor on
our list so QuickBooks does not know which expense goes with this vendor so we go down here to the
bottom left just as we learned in the previous writer checks window we have to put the expense
that we're entering the bill for click here and you get the entire chart of accounts the expense
that we're recording is electric expense this is what the information would look like on the bill
when we record and read it from the bill when we click Save and close we notice accounts payable
shows up for the very first time as a thousand dollars and electric expense also shows up for
the very first time as a thousand dollars we can also open the vendor reports which the choice here
is vendor balance detail and as you notice on the vendor balance detail we have one bill from
con Edison bill number six one six one we owe specifically con Edison a thousand dollars now
let's enter a second bill and see what happens on April 14th we received the repair bill from
rex repair the amount is two thousand and the bill is six two six two can you imagine how this bill
would affect the trial balance and the general ledger and the chart of accounts when we record
it well right now there is no repair expense in the trial balance however when we enter
our first repair bill for two thousand repair expense will show up on the trial balance as
two thousand right now accounts payable is only one thousand from the electric bill however if
we record another bill from another vendor for two thousand account payable will become three
thousand dollars if you want more detail about why accounts payable as three thousand you would look
at the vendor balance detail before the repair bill we only owed kinetise in a thousand but
now we're entering a repair bill from rex repair for two thousand that means that the total money
that we owe to all vendors after we enter this repair bill will be three thousand which is the
same as accounts payable in the trial balance let's take a look when you look at the trial
balance before we enter this bill account payable is only a thousand and there is no repair expense
to enter the bill from the vendor click vendor enter bill of course we put the date April 14 the
reference number 6 - 6 - the amount 2000 so far it's pretty easy the vendor is Rex repair now we
have to put the expense that's associated with this bill however repair expense is not on the
list it is not yet in the chart of accounts but we learned in previous videos you can add an expense
or you can add an account at the moment you make the transaction if you click this arrow and scroll
all the way up to the top of the chart of accounts you get the option for adding new that means you
can add the account at the moment you make the transaction notice the account type is already
chosen as expense that's because QuickBooks knows if you're adding an account from the enter bill
window probably you're adding an expense when we click continue expense has already chosen for us
as the account type all we have to do is type in the name let's type it in in capital letters
so QuickBooks knows that it's an account that we added and not what QuickBooks added when we
click Save and close we have repair expense in our bill and when we save and close the bill notice
accounts payable has increased to 3,000 and repair expense has shown up on the trial balance for the
first time as 2000 remember this bill did not only affect the chart of accounts and the trial
balance it also affected our vendor records which we can check here in the vendor balance detail as
you can see we are we still owe con Edison a thousand for the electric bill but now we
also owe R extra hair 2004 the repair bill which means the total we owe to all vendors is now three
thousand in the vendor balance detail which is equal to accounts payable three thousand dollars