Introduction

Processing purchases and payments are critical activities of small businesses. Not only must you follow practices that increase cash flow and protect the company’s cash from misuse, but you must process it accurately to productively manage the company’s cash flow and maintain good vendor relations.

This chapter provides you with step-by-step guidance for processing purchase and payment transactions.

The guidance in the chapter is useful to bookkeepers as well as personnel involved in purchases and payments activities. The chapter helps purchases and payments personnel fine-tune their processing activities and provides newly hired or cross-trained employees with a foundation for processing purchases and payments.

Accounting Process Automation

Accounting process automation automates traditional routine manual purchases and payment processes. Automation improves the speed, accuracy, and reliability of everyday transactional documents such as expenses, bills, payments, vendor credits, and credit card credits.

This chapter uses accounting process automation to efficiently and productively process purchases and payments with QuickBooks.

Important: In this chapter, we address processing purchase and payment transactions. To automate routine purchase and payment transactions, we utilize online bank and credit card connection setups. This feature allows QuickBooks to automatically import your company’s purchase and payment transactions directly from your company’s online bank and credit card accounts. This feature improves the speed, accuracy, and reliability of recording purchase and payment transactions because you’re no longer required to manually record or create these transactions.

Hypothetically, if all your company’s purchase and payment transactions flowed through your QuickBooks-connected bank and credit card accounts, you wouldn’t need to manually record any purchase and payment transactions. Processing purchase and payment transactions would be as easy as importing and reviewing the transactions and reconciling the bank and credit card accounts. However, not all your company purchase and payment transactions that flow through your bank and credit card accounts provide you with the information you may need or want.

For example, if you purchase products or services on account (credit purchases) you need to record the vendor invoice (bill). When you pay a bill, you need to record the payment. If you’re issued a credit on your account or refund, you need to record the vendor credit or refund. If you only import your company’s purchase and payment transactions directly from your company’s online bank account, your accounting system will only record the payment and refund. The payment and refund information will display in your profit and loss report, but the timing of the purchase or refund information will be off. To be useful, accounting information must be timely, relevant, and reliable. You also will not have the accounts payable information necessary to monitor and pay money you owe.

Throughout this chapter, we provide instructions and step-by-step procedures to enable you to manually record purchase and payment transactions for those times when you need or want to.

When we work with new clients, we set up their accounting system using QuickBooks-connected bank and credit card automation. We monitor the financial information the system is communicating and add manual procedures as necessary to communicate the client’s financial position, profit, and cash flow.

Purchases and Payments Tools

The following tools are needed to process purchases and payments:

• QuickBooks
• Company online bank account(s) compatible with QuickBooks
• Company credit card(s) (business credit card or personal credit card used only for business) compatible with QuickBooks
• Company one sheet, two-part voucher QuickBooks compatible checks

Bookkeeper Tasks

Your purchases and payments tasks include:

1. Manage Vendors
2. Record advance payments and cash purchases
3. Record purchases on account
4. Record purchase credits and refunds
5. Email purchases and payments reports

Accountant Tasks

Your accountant’s purchases and payments tasks include:

1. Set up your company’s Expenses settings
2. Provide processing purchases and payments training
3. Support purchases and payments questions or problems
4. Review your monthly purchase and payment transactions and balances
5. Customize, group, and schedule your daily, weekly, monthly, quarterly, and annual expense reports

What are Purchases?

Purchases are the products or services your company buys including assets (inventory, equipment, and furniture) and expenses (advertising, insurance, and supplies).

What is the Purchases Process?

The purchase process is the steps taken to buy and pay for products or services from vendors. This set of sequential, interrelated activities is known as the purchase process or cycle. The activities involved with purchases depend on how you buy and pay for vendor products and services.

What are Payments?

Payments are cash purchases (including checks and credit cards) on vendor accounts. It is the movement of money from an individual or business to another individual or business in exchange for a product or service. Payments are the means by which one compensates another.

What are Expenses?

An expense is a cost incurred that can be justified through a payment. In a business, expenses are the costs of operations necessary to generate revenue. The most common expenses include payments to suppliers, rent or real estate, and maintenance. Employee wages are also considered an expense when referring to the company’s income statement.

What are Bills?

A bill is an invoice sent to an individual or business from the vendor for money owed for products or services that have been provided but not paid. The term invoice is used by the sender, while the term bill is used by the receiver. Just as you set invoice payment terms for your customers, your vendors will also have terms regarding when and how the payment for the bill should be made.

What is the Difference Between a Bill and an Expense?

A bill is an expense. However, the difference between a bill and an expense is that a bill represents something you’ll pay for at a later time, while an expense represents something you have already paid for.

What is a Purchase Discount?

A purchase discount is an offer from the supplier to the buyer, to reduce the payment amount if the payment is made within a certain period of time. For example, if a buyer purchased a $100 item with a purchase discount term 3/10, net 30, the buyer would receive a 3% or $3 discount if the buyer pays within 10 days. If not, the full amount is due within 30 days.

Types of Purchase Transactions

There are three main types of purchase transactions: advance payment purchases, cash purchases, and credit purchases. The difference between these purchase transactions is in the timing of when payment is made.

1. Advance payment purchases: You pay the vendor before the products or services are shipped, delivered, or performed
2. Cash purchases: (time of sale or completion of service): Payment is made at the time the product or service is purchased, shipped, delivered, or performed
3. Purchases on account: You’re provided a period of time to pay the vendor after the product or service is purchased, shipped, delivered, or performed

Cash Management

The cash management rule pertaining to purchases is to Pay as late as possible but within terms. Therefore, the purchases on account policy comply best with the Pay as late as possible, but within terms rules. However, the policy may not be practical or generally accepted in certain industries or with certain products and services. For example, if you pay for SaaS (Software as a Service) subscriptions, such as QuickBooks or Microsoft 365, they’re only sold on monthly or annual advance payments.

Whenever possible, try to work with vendors who offer credit terms to retain your cash as long as you can. In addition, negotiate with those vendors to extend their credit terms. For example, if they offer credit terms of Net 15, negotiate the terms to Net 30.

While the rule is to pay as late as possible, always pay your bills on time. Experienced, successful business owners understand the importance of relationships. Whether those relationships be with employees, customers, bankers, or vendors; developing and maintaining good relationships buys you a lot of latitudes. Employees would rather work for, customers would rather buy from, bankers would rather lend to, and vendors would rather supply to business owners they have good relationships with. Not paying your bills on time is a fast track to ruining a good relationship. For example, who are your best customers? That’s right, the ones who pay on time. And who are the worst? Right again, the ones who don’t pay on time.

Manage Vendors

Before you start creating purchases or payments, you need to manage your vendors.

Managing your vendors include:

1. Add a vendor
2. Edit vendor information
3. Inactivate a vendor
4. Merge vendors

Add a Vendor

To add a vendor:

1. Select Expenses from the left menu, then select Vendors
2. Select New Vendor
3. The Vendor information window appears
4. Complete the fields in each section of the Vendor information window except the Opening balance fields. Opening balance fields should only be completed during setup. Obtain any missing field information
5. The Display name is the name that will appear in QuickBooks as the default Company name
6. Add any applicable notes or attachments
7. Select Save

Edit Vendor Information

There may be times when you need to change a vendor’s information, such as the terms or billing address. You can do this by editing the vendor. When you edit vendor information, the changes will be reflected in other areas of your company file including previously sent invoices. QuickBooks also updates any recurring templates that use previous information such as:

• Billing Address
• Email
• Terms
• Phone number

To edit vendor information:

1. Select Expenses from the left menu, then select Vendors
2. Select the vendor’s name from the list or search the vendor by name or details
3. Select Vendor Details
4. Select Edit
5. Update vendor information
6. Select Save

Inactivate a Vendor

If you need to remove a vendor so they don’t appear as an option when creating purchases or payments, you make them inactive. You can’t delete a vendor.

To make a vendor inactive:

1. Select Expenses from the left menu, then select Vendors
2. Search the vendor by name and select Vendor Details
3. Select Edit, then Make inactive
4. Select Yes to make the vendor inactive

Merge Vendors

If a vendor has been created twice or has a duplicate profile by mistake, it’s usually best to merge the two vendors, as opposed to making one of the two inactive.

Note: Be aware that the merging process is not reversible and can’t be undone.

To merge vendors:

1. Select Expenses from the left menu, then Vendors
2. Search the vendor you don’t want to use by name and select Vendor Details
3. Select Edit
4. Change the Title fields (First name, Middle name, Last name, and Suffix) and the Display Name to make them identical to the vendor you want to merge with
5. Select Save, then select Yes to confirm that you want to merge the two vendors

Purchases and Payments Process

Frequency

Process purchases and payments daily to generate timely, relevant, and reliable financial information. Bills received and expenses incurred over the weekend or holiday should be processed the following Monday or business day. You can create purchases and payments one at a time throughout the day or all at once at the end of the day. However, all at once is usually more efficient.

Processing Purchases and Payments

How you process purchase and payment transactions depend on the type of purchase transaction, methods of payment, and technology.

Type of Purchase Transaction

How you record purchase transactions in QuickBooks depend on the type of purchase transaction.

1. Advance payment purchases: Expense and Check
2. Cash purchases (at the time of purchase or completion of service): Expense and Check
3. Purchases on account: Bill, Pay Bills, Vendor Credit, Credit Card Credit, and Print Checks

Acceptable Methods of Payment

Acceptable methods of payment may include cash, checks, credit cards, ACH bank transfers (eCheck), and online payment systems such as PayPal.

When you do make an advance, cash, or purchases on account payments, use a credit card with a rewards program (this applies to your personal payments as well). Use a business credit card or personal credit card used only for business. That way you don’t have to review the card transactions to determine if the transactions are business or personal expenses. Business credit cards usually offer better benefits than personal credit cards used for business, but business cards generally have higher annual fees.

Credit cards with reward programs can be quite beneficial. Rewards such as airline miles or hotel stays can add up very quickly when used to pay business expenses. You may want to use the card used for business for miles and the card used for personal expenses for hotels. Many business owners take luxurious annual vacations based on the business and personal credit card miles earned each year.

Credit cards provide the business owner with greater protection than checks. If someone uses your credit card and makes unauthorized purchases, you can dispute those charges and have your money returned. If someone uses your checks and makes unauthorized purchases, it’s difficult if not impossible to have your money returned.

Purchases and Payments Process

The purchases and payments process include:

1. Record advance payments and cash purchases
2. Create Expenses
3. Create Checks
4. Record purchases on account
5. Create Bills
6. Pay Bills
7. Record purchase credits and refunds
8. Create Vendor Credits
9. Create Credit Card Credits
10. Create Vendor Refunds
11. Email purchases and payments reports

Record Advance Payment and Cash Purchases

Note: If you’re paying, will pay, or have paid for a purchase with a check, in QuickBooks you use Check to create a check to pay now, Pay bills to create checks for Bills you have entered and will pay, and Expense to record a check you have written outside of QuickBooks (you can also enter the check directly in the checking account Register).

General Expense Transaction Rules

There are three rules to follow when it comes to purchases.

Bank and Credit Card Downloaded Transactions (Bank Feeds)

Bank Feeds connects QuickBooks to your bank and credit card accounts and download transaction information automatically. Therefore, you don’t need to manually create Expense transactions when expenses are paid with your QuickBooks-connected bank and credit card accounts. However, you may want to create Expense transactions to generate timely, relevant, and reliable financial information. Some bank and credit card accounts imported Expense type transactions can take days to import. If the transaction is large or numerous and omitted, reports may be misleading. For example, if there’s a large expense transaction incurred at the end of the month and is not imported until the first of the month, that month’s income statement (P&L) profit’s overstated.

You do need to manually create Check and Bill transactions when paying bills with a company check. When check transaction information is downloaded in the bank feed, the transaction is matched to the manually created check. You should select the manually created check over the bank feed downloaded transaction information. The information from a manually created transaction is generally more detailed and informative than a bank feed downloaded transaction.

Create an Expense

You manually create an Expense transaction when an expense transaction has not been paid from a QuickBooks-connected company bank or credit card account. QuickBooks-connected company bank or credit card account expense transactions are automatically downloaded, reviewed, and added or matched to your QuickBooks file. Therefore, you should only manually create Expense transactions for expenses paid from company cash accounts, such as petty cash, or noncompany cash, bank, or credit card accounts, such as personal accounts. In some instances, you may want to manually create an Expense transaction in addition to a QuickBooks-connected company bank or credit card account expense transaction to provide more detailed expense transaction information than the downloaded transaction may provide.

Tip: If you have a large number of expenses to create, it may be easier to enter them in the checking or credit card account register (Account history).

Creating Expenses includes:

1. Create an Expense
2. Make a Recurring Expense
3. Edit an Expense
4. Void an Expense
5. Delete an Expense

To create an Expense:

1. Select New from the left menu, then select Expense
2. Select the name of the vendor from the Payee dropdown menu or type the first letter(s) to retrieve the vendor and select the Payment account used to pay the expense
3. Select Add new if the vendor is not set up. Take the time now to set up vendor details
4. Enter the Payment date and Payment method (type) used to pay the expense
5. Enter the receipt reference number in the Ref no. field to identify the expense receipt
6. (Optional) Enter any applicable tags
7. For the Category details, select the expense account from the Category dropdown menu and enter or change the Description and Amount
8. If you need to add a new account or are unsure what account to classify the expense to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transactions
9. Delete, add, or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
10. (Optional) For the Item details, select any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount.
11. Select Add new if the product or service is currently not set up
12. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this expense and add any attachments
13. Select Save and new to save your work and start a new expense or Save and close to save the expense and close the window. You can select Save at any time to save your work without leaving the expense

Behind the Scenes

When you create an Expense, QuickBooks increases (debits) an asset (Balance Sheet: Asset) or expense (Profit and Loss: Expenses) account and decreases (credits) a bank account (Balance Sheet: Asset) or increases a credit card account (Balance Sheet: Current Liabilities) by the amount paid.

Example – A company purchased an item for $100 with a sales tax rate of 6.5% at the time of purchase.

T Accounts:

Note: You can go to a previously created Expense transaction to view the Transaction Journal.

To view the Transaction journal:

1. Select the Expense transaction you would like to view
2. Select More at the bottom of the transaction
3. Select Transaction journal

Make Recurring Expenses

You can create a Recurring Expense for purchases that occur periodically or frequently.

For example, you may purchase assets or expenses periodically for a fixed fee or payment. By creating a Recurring Expense, you don’t have to create and pay it each period. You can schedule it to be created and paid automatically.

You may purchase the same assets or expenses frequently. By creating a Recurring Expense, you don’t have to create and pay it every time you purchase it.

You may also purchase assets or expenses that don’t occur periodically or frequently, but the accounts are numerous, and/or the descriptions are detailed, and it takes time to create them. By creating a Recurring Expense, you don’t have to take the time to recreate it every time you purchase it.

To create a Recurring Expense:

1. Select the Gear icon on the toolbar, then select Recurring Transactions
2. On the Recurring Transactions page, select New
3. Select Expense from the Transactions Type dropdown menu and select OK
4. Enter a Template name and choose a Type — Scheduled, Reminder, or Unscheduled

Scheduled

1. What it does: Creates purchases according to a schedule you set
2. This type is useful for purchases (assets or expenses) with fixed schedules and amounts

Reminder

1. What it does: Proposes a series of expenses according to the schedules you set. The expenses are not paid until you decide to create and pay them. These reminders are found in the Tasks section at the top of the Dashboard page. The Tasks section only appears when you have tasks. The reminders can also be found on the Reminder List
2. How you control it: By selecting each expense you’ll be able to decide which ones to create, and you can review and edit them first before scheduling them
3. This type is useful for expenses with a fixed schedule that needs to be edited before they’re created

Unscheduled

1. What it does: It is saved with partial or complete data and without a schedule. Nothing happens to this type of expense until you choose to use it
2. How you control it: Unscheduled transactions don’t have timetables; you use them as needed from the Recurring Transactions list. You select the purchase and select Use to use it as the starting point for a new expense
3. This type is useful for transactions that contain a lot of detail that you don’t want to retype, but that isn't needed on any set schedule such as complicated purchases that need to go to different vendors
4. (Optional) Enter how many days to create in advance
5. Select the name of the payee from the dropdown menu or type the first letter(s) to retrieve the payee and select the account you’ll pay with
6. Select Add new if the payee is not set up. Take the time now to set up payee details
7. Select the interval for the Recurring transaction
8. This dictates when and how often the transaction will take place
9. (Optional) Select a Start date and End (None, By, or After) to start and end the recurring expense
10. Select the desired Payment method from the dropdown menu
11. (Optional) Enter any applicable tags
12. For the Category details, select the expense account from the Category dropdown menu and enter or change the Description and Amount
13. If you need to add a new account or are unsure what account to classify the purchase to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transaction
14. Delete, add or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
15. (Optional) For the Item details, select or add any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
16. Select Add new if the product or service is currently not set up. All fields must be entered for Scheduled templates. For example, if an item has a rate of $0, enter 0. If left blank, the line will not save
17. It is not necessary to fill in every field for Reminder or Unscheduled templates. Enter just the data to be repeated in each occurrence. You'll be able to edit each occurrence before it’s actually created
18. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this expense and add any attachments
19. Select Save template

Note: You can make a Recurring Expense template from any existing Expense. To make a Recurring Expense template from an existing Expense, open an existing Expense and select Make Recurring at the bottom of the page.

Edit an Expense

To edit an Expense:

1. Select the Search icon, then Advanced Search
2. Select Expenses from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search
4. Scan the expense transaction matches and select the expense to edit
5. Edit the transaction
6. Select Save and close

Void an Expense

To void an Expense:

1. Select the Search icon, then Advanced Search
2. Select Expenses from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search
4. Scan the expense transaction matches and select the expense to void
5. Select More, then Void
6. Select Save and close

Delete an Expense

To delete an Expense:

1. Select the Search icon, then Advanced Search
2. Select Expenses from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search
4. Scan the expense transaction matches and select the expense to delete
5. In the Expense window, select More at the bottom of the window and then select Delete
6. Select Yes to confirm that you want to delete the transaction. Once you delete an expense, only the Audit log maintains a record of it. To open the Audit log, from the left menu, select Reports and enter Audit log in the search bar

Create Checks

Creating checks in QuickBooks lets you track expenses and helps organize your checking account and bank statement reconciliation.

Creating checks includes:

1. Create a Check
2. Make Recurring Checks
3. Edit a Check
4. Void a Check
5. Delete a Check
6. Print Checks

Create a Check

To create a Check:

1. Select New from the left menu, then select Check
2. The Check page opens
3. Select the name of the payee from the Payee dropdown menu or type the first letter(s) to retrieve the payee and specify the Bank Account where the money will be withdrawn
4. Select Add new if the payee is not set up. Take the time now to set up payee details
5. Verify the Mailing address and Payment date
6. Verify or change the Check no
7. Check the Print later box if you plan to print the check later. If you want to print the check, leave the Print later box unchecked
8. (Optional) Add any applicable tags
9. For the Category details, select the account the purchase will be classified to from the Category dropdown menu, change or enter the Description and Amount
10. If you need to add a new account or are unsure what account to classify the purchase to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transactions
11. Delete, add or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
12. (Optional) For the Item details, select or add any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
13. Select Add new if the product or service is currently not set up
14. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this check and add any attachments
15. If you want to print the check, select Print check. The check is saved, and the Print Checks window appears. Select Preview and Print, then Print. Select Close and answer “Did your checks print OK?”, then Done
16. Select Save and close to save the check and close the window
17. If you want to create another check, select Save and new to save the check and create a new check. Select Save and close after the last check you create
18. To print the check later, select Save and close to save the check and close the window

Behind the Scenes

When you create a Check, QuickBooks increases (debits) an asset (Balance Sheet: Asset) or expense (Profit and Loss: Expenses) account and decreases (credits) the bank account (Balance Sheet: Asset) by the amount paid.

Example – Company purchased an item for $100 with a sales tax rate of 6.5% with a check.

T Accounts:

Note: You can go to a previously created Check transaction to view the Transaction Journal.

To view the Transaction journal:

1. Select the Check transaction you would like to view
2. Select More at the bottom of the transaction
3. Select Transaction journal

Making Recurring Checks

You can create a Recurring Check for purchases that occur periodically or frequently.

For example, you may purchase assets or expenses or make rent or loan payments periodically for a fixed fee or payment. By creating a Recurring Check, you don’t have to create and pay it each period.

You can schedule it to be created and paid automatically. You may purchase the same assets or expenses frequently. By creating a Recurring Check, you don’t have to create and pay it every time you purchase it.

You may also purchase assets or expenses that don’t occur periodically or frequently, but the accounts are numerous, and/or the descriptions are detailed, and it takes time to create it. By creating a Recurring Check, you don’t have to take the time to recreate it every time you make the purchase.

To create a Recurring Check:

1. Select the Gear icon on the toolbar, then select Recurring Transactions

1. On the Recurring Transactions page, select New
2. Select Check from the Transactions Type dropdown menu and select OK
3. The Recurring Check page opens

1. Enter a Template name and choose a Type - Scheduled, Reminder, or Unscheduled

Scheduled

1. What it does: Creates purchases and payments according to a schedule you set
2. This type is useful for purchases (assets or expenses) and rent or loan payments with fixed schedules and amounts

Reminder

1. What it does: Proposes a series of checks according to the schedules you set. The checks are not paid until you decide to create and pay them. These reminders are found in theTasks section at the top of the Dashboard page. The Tasks section only appears when you have tasks. The reminders can also be found on the Reminder List
2. How you control it: By selecting on each check you’ll be able to decide which ones to create, and you can review and edit them first before scheduling them
3. This type is useful for checks with a fixed schedule that need to be edited before they’re created

Unscheduled

1. What it does: It is saved with partial or complete data and without a schedule. Nothing happens to this type of check until you choose to use it
2. How you control it: Unscheduled transactions don’t have timetables; you use them as needed from the Recurring Transactions list. You select the purchase and select Use to use it as the starting point for a new check
3. This type is useful for transactions that contain a lot of detail that you don’t want to retype, but that isn't needed on any set schedule such as complicated purchases that need to go to different vendors
4. (Optional) Enter how many days to create in advance
5. Select the name of the payee from the dropdown menu or type the first letter(s) to retrieve the payee and select the account you’ll pay with
6. Select Add new if the payee is not set up. Take the time now to set up payee details
7. Select the interval for the Recurring transaction
8. This dictates when and how often the transaction will take place
9. (Optional) Select a Start date and End (None, By, or After) to start and end the recurring check
10. Verify the Mailing Address
11. Verify or change the Check no
12. With a recurring check, the Check no. will auto-populate with the most current check number
13. Check the Print later box if you plan to print the check later. If you want to print the check, leave the Print later box unchecked
14. (Optional) Enter any applicable tags
15. For the Category details, select the expense account from the Category dropdown menu and enter or change the Description and Amount
16. If you need to add a new account or are unsure what account to classify the purchase to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transactions
17. Delete, add or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
18. (Optional) For the Item details, select or add any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
19. Select Add new if the product or service is currently not set up. All fields must be entered for Scheduled templates. For example, if an item has a rate of $0, enter 0. If left blank, the line will not save
20. It is not necessary to fill in every field for Reminder or Unscheduled templates. Enter just the data to be repeated in each occurrence. You'll be able to edit each occurrence before it’s actually created
21. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this expense and add any attachments
22. Select Save template

Note: You can make a Recurring Check template from any existing Check. To make a Recurring Check template from an existing Check, open an existing Check, and select Make Recurring at the bottom of the page.

Edit a Check

To edit a Check:

1. Select the Search icon, then Advanced Search
2. Select Checks from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search
4. Scan the check transaction matches and select the check to edit
5. Edit the transaction
6. Select Save and close

Should You Delete or Void a Check?

One of the most common errors made in QuickBooks is deleting a check that should be voided. You shouldn’t delete checks that have been printed.

You shouldn’t void a check that already has been cleared during the bank reconciliation for a prior month. If you void a check issued in a prior fiscal period that already has been “closed,” QuickBooks changes the cash and other affected general ledger account balances as of the prior balance sheet date. Consequently, to restore balances as of the prior balance sheet date, your accountant would need to create a journal entry as of the prior balance sheet date to credit the cash account and debit the account to which the check was charged originally. In addition, a journal entry would need to be created in the fiscal period in which the check actually was voided to debit cash and credit the account to which the check was charged originally. If the amount of the voided check is material, the accountants should consider whether a prior-period adjustment should be created.

Voiding a check is not the same as deleting a check, and you should understand the differences.

The primary differences are:

• QuickBooks retains transaction details about voided checks and continues to list voided checks in the bank account register (with a “VOID” notation and a “0.00” check amount) but doesn’t retain transaction details about deleted checks or list them in the check register
• Deleting a check creates a gap in check numbers within QuickBooks. However, QuickBooks retains the check number information associated with voided checks

You can find information about deleted checks via the “Audit Log” report in QuickBooks. The report lists the check date, payee, affected accounts, and amount, as well as the date and time the original check was printed, the date and time the check was deleted, and the user who deleted the check. However, you can’t double-select the report information to view a deleted check.

Due to the reasons discussed, you shouldn’t delete checks that have been printed. Those checks should be voided. For example, you may need to void a check issued in error or with a mistake. If an erroneous check has not been printed, you can delete the check, but you can also void the check.

Void a Check

To void a Check:

1. Select the Search icon, then Advanced Search
2. Select Checks from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search.
4. Scan the check transaction matches and select the check to void
5. Select More, then Void
6. Select Save and close

Delete a Check

To delete a Check:

1. Select the Search icon, then Advanced Search
2. Select Checks from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search
4. Scan the check transaction matches and select the check to delete
5. In the Check window, select More at the bottom of the window and then select Delete
6. Select Yes to confirm that you want to delete the transaction

Once you delete a check, only the Audit log maintains a record of it. To open the Audit log, select the Gear icon on the toolbar, then Audit Log under Tools.

Print Checks

To Print Checks:

1. Select New from the left menu
2. Under Vendors, select Print Checks
3. The Print Checks set up window will appear
4. Select the check(s) you want to print
5. Insert the number of checks you want to print into your printer. Depending on your laser printer, make sure the checks are facing the correct way to print
6. Select Preview and Print
7. Select Print

Record Purchases on Account

When you receive a bill from a vendor, QuickBooks allows you to create and pay it when it’s due. To create and pay bills, you can use the Bill and Pay Bills pages, which lets you enter and pay multiple bills and vendors at the same time, or use the Check page, which provides more information about a bill, but is better for paying one vendor at a time.

Create a Bill

Your QuickBooks connected credit card account(s) downloads transaction information automatically. Therefore, you don’t need to manually create Bill and Pay Bills transactions when bills are paid with your QuickBooks-connected credit card account. However, you do need to manually create Bill and Pay Bills transactions when paying bills with a QuickBooks-connected bank account company check. The checks are downloaded automatically, but you need to create the checks. In addition, the Bill and Pay Bills feature allows you to efficiently manage the cash payment rule Pay as late as possible, but within terms.

Creating Bills include:

1. Create a Bill
2. Make Recurring Bills
3. Edit a Bill
4. Void a Bill
5. Delete a Bill

To create a Bill:

1. Select New from the left menu, then select Bill
2. The Bill page will then appear
3. Select the name of the vendor from the Vendor dropdown menu or type the first letter(s) to retrieve the vendor
4. Select Add new if the vendor is not set up. Take the time now to set up vendor details
5. Verify the Mailing address and select the bill's Terms from the dropdown menu. The terms indicate when the vendor expects payment
6. Verify the Bill date and specify the Due date for the bill. The Bill date is the date the bill was created, entered, or received, and the Due date is the date payment must be made to the vendor
7. In the Bill no. field, enter a bill number or reference
8. (Optional) Enter any applicable tags
9. For the Category details, select the account from the Category dropdown menu and enter or change the Description and Amount
10. If you need to add a new account or are unsure what account to classify the bill to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transactions
11. Delete, add or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
12. For the Item details, select any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
13. Select Add new if the product or service is currently not set up
14. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this bill and add any attachments
15. Select Save and schedule payment, Save and new to save your work and start a new bill, or Save and close to save the bill and close the window. You can select Save at any time to save your work without leaving the bill

The Bill is entered into the system and you can pay it from the Pay Bills page.

Behind the Scenes

When you create a Bill (vendor invoice), QuickBooks increases (debits) an asset (Balance Sheet: Asset) or expense (Profit and Loss: Expenses) account and increases (credits) the accounts payable account (Balance Sheet: Current Liabilities) by the Bill amount.

Example – Company purchased an item for $100 with a sales tax rate of 6.5% on account.

T Accounts:

Note: You can go to a previously created Bill transaction to view the Transaction journal.

To view the Transaction journal:

1. Select the Bill transaction you would like to view
2. Select More at the bottom of the transaction
3. Select Transaction journal

Make Recurring Bills

To make a Recurring Bill:

1. Select the Gear icon on the toolbar, then select Recurring Transactions
2. Select New
3. Select bill as the Transaction Type and then select OK
4. Enter a Template name (ex. Telephone Bill or Monthly Building Lease) and choose a Type — Scheduled, unscheduled, or reminder

Scheduled

1. What it does: Creates bills according to a schedule you set
2. This type is useful for bills with fixed schedules and amounts

Reminder

1. What it does: Proposes a series of bills according to the schedules you set. The bills are not paid until you decide to create and pay them. These reminders are found in the Tasks section at the top of the Dashboard page. The Tasks section only appears when you have tasks. The reminders can also be found on the Reminder List
2. How you control it: By selecting on each bill you’ll be able to decide which ones to create, and you can review and edit them first before scheduling them
3. This type is useful for bills with a fixed schedule that needs to be edited before they’re created

Unscheduled

1. What it does: It is saved with partial or complete data and without a schedule. Nothing happens to this type of bill until you choose to use it
2. How you control it: Unscheduled transactions don’t have timetables; you use them as needed from the Recurring Transactions list. You select the purchase and select Use to use it as the starting point for a new bill
3. This type is useful for transactions that contain a lot of detail that you don’t want to retype, but that isn't needed on any set schedule such as complicated purchases that need to go to different vendors
4. (Optional) Enter how many days to create in advance
5. Select the name of the vendor from the dropdown menu or type the first letter(s) to retrieve the vendor
6. Select Add new if the vendor is not set up. Take the time now to set up vendor details
7. Select the interval for the Recurring transaction
8. This dictates when and how often the transaction will take place
9. (Optional) Select a Start date and End (None, By, or After) to start and end the recurring bill
10. Verify the Mailing address and select the bill's Terms from the dropdown menu. The terms indicate when the vendor expects payment
11. (Optional) Enter any applicable tags
12. For the Category details, select the expense account from the Category dropdown menu and enter or change the Description and Amount
13. If you need to add a new account or are unsure what account to classify the purchase to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transaction
14. Delete, add or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
15. For the Item details, select or add any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
16. Select Add new if the product or service is currently not set up. All fields must be entered for Scheduled templates. For example, if an item has a rate of $0, enter 0. If left blank, the line will not save
17. It is not necessary to fill in every field for Reminder or Unscheduled templates. Enter just the data to be repeated in each occurrence. You'll be able to edit each occurrence before it’s actually created
18. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this bill and add any attachments
19. Select Save template

Edit a Bill

To edit a Bill:

1. Select the Search icon, then Advanced Search
2. Select Bills from the All Transactions dropdown menu
3. Enter the vendor in the Enter Vendor field and select Search
4. Scan the bill transaction matches and select the bill to edit
5. Edit the transaction
6. Select Save and close

Void a Bill

You can’t void a Bill.

Delete a Bill

To delete a Bill:

1. Select the Search icon, then Advanced Search
2. Select Bills from the All Transactions dropdown menu
3. Enter the vendor in the Enter Vendor field and select Search
4. Scan the bill transaction matches and select the bill to delete
5. In the Bill page, select More at the bottom of the page and then select Delete
6. Select Yes to confirm that you want to delete the transaction
7. Once you delete a Bill, only the Audit log maintains a record of it. To open the Audit log, from the left menu, select Reports and enter Audit log in the search bar

Pay Bills

Frequency

Good cash management requires paying your bills as late as possible, but within terms to maintain good vendor relations. To pay your bills as late as possible, but within terms, pay your vendor invoices on a set day each week such as Friday.

There are three ways to pay bills in QuickBooks Online:

1. Pay Bills Online (Not Recommended)
2. Record Bill Payments (manual payment)
3. Pay Bills by Check

Each Friday you should filter and sort your bills to determine which bills are due by the following Friday.

The Pay Bills page allows you to review the bills you have entered and select the ones that are due. This is where you can pay multiple vendors or invoices at one time.

To view the Pay Bills page, select New from the left menu, then select Pay Bills.

To determine the bills that are due, you need to understand how to filter and sort bills.

Paying Bills includes:

1. Filter Bills
2. Sort Bills
3. Pay Bills
4. Pay Multiple Bills by Check
5. Print Checks for Bills

Filter Bills

By default, the list shows bills that are due within the last 365 days, but you can use the options available from the Filter to filter the list. You can filter for:

• Bills due on a certain Due Date
• Bills in a date range you specify
• Bills due on or before a certain date (leave the From field blank and enter the date in the To field)
• Bills only for all or a specific Payee
• Bills in Overdue status only

Sort Bills

To sort by a particular column in ascending order (up arrow), select the header of that column. To sort in descending order (down arrow), select the header again. You can sort the Pay Bills list by:

• Payee
• Ref. No.
• Due Date
• Open Balance

If you sort by Payee or Open Balance, bills with that payee or balance are listed in date order.

The Pay Bills page remembers your sorting preference, and the list will be sorted the same way the next time you open the page.

Tip: Filter first and sort second. If you filter the list before you sort it, you'll find the transactions you’re looking for faster.

You can also change the number of rows displayed using the options available from the Gear icon, located above the Total Amount column.

Pay Bills Online

Note: We strongly recommend that you don’t use this method by paying with a credit card. It goes against cash management rules. Why pay a 2.9% fee to pay a bill with a credit card when you can pay a bill with the same credit card without incurring a 2.9% fee?

If you’re paying with a credit card you’ll want to enter the payment using Record Bill Payments.

QuickBooks Online has a feature that allows you to pay bills directly from QuickBooks. You can make the payment with a bank account or debit card for free, or a credit card for a 2.9% fee per transaction. The vendor then receives the payment via ACH bank transfer within 1-2 business days or via paper check within 5-7 business days. The first time you pay a vendor using online bill payment, there will be a few extra steps.

To pay bills online:

1. Select New from the left menu, then select Pay Bills
2. Select the bill from the list
3. Select Schedule online payment
4. On the Get Started page, select Continue
5. Select the method you would like to use to pay the bill

If a Credit card or debit card:

1. Enter card details and select Save my card and continue
2. Enter cardholder details, then select Complete and save

If a Bank account:

1. Select Connect instantly to connect your bank account
2. Search for your bank and select your bank, then enter bank account information to connect
3. Select how the vendor will receive payment, then select Continue

If Bank Transfer ACH:

1. Enter the vendor’s routing number and account number, then select Save bank details

If Paper Check:

1. Enter the vendor’s mailing address, then select Save details
2. Select the date for your payment to be scheduled
3. Review the arrival date to ensure the payment is made before the due date
4. Select Continue
5. Enter a note or invoice number for the vendor (Optional), then select Continue
6. Review the payment information and make any necessary changes, then select Continue
7. Select Confirm and schedule payment
8. Select Notify my vendor to enter the vendor’s email and let them know the payment is on the way (Optional), then select I’m done here to finish

To cancel, edit, or view the status of a bill payment:

1. Select Expenses from the left menu
2. Find and select the bill from the list
3. Select View payment details, then edit or cancel as needed

Behind the Scenes

When you pay a Bill (vendor invoice) with a credit card, QuickBooks decreases (debits) the accounts payable account (Balance Sheet: Current Liabilities) and increases (credits) the credit card account (Balance Sheet: Current Liabilities) by the Bill amount.

Example – A company paid a bill for $100 with a sales tax rate of 6.5% on the account using a Credit Card.

T Accounts:

Note: You can go to a previously created Bill transaction to view the Transaction journal.

To view the Transaction journal:

1. Select the Bill transaction you would like to view
2. Select More at the bottom of the transaction
3. Select Transaction journal

Record Bill Payments

Pay each bill with your company credit card via the most efficient payment method. For example, you can usually pay a bill by credit card via a vendor’s online email invoice, website, telephone, mail, or onsite. However, the most efficient way to pay by credit card is online email invoice or website. After making the payment, record the payment in QuickBooks.

Tip: When paying online by credit card make sure the email or website is secure. Always look for “https:” (Hypertext Transfer Protocol Secure) at the beginning of the website address. “https:” is a variant of the standard web transfer protocol “HTTP” (Hypertext Transfer Protocol) that adds a layer of security on the data in transit through a secure socket layer (SSL) or transport layer security (TLS) protocol connection. The same security is used by banks.

To record multiple bill payments by credit card:

1. Select New from the left menu, then select Pay Bills
2. The Pay Bills window will appear
3. Select the appropriate credit card Payment account and enter or verify the Payment date
4. Select the Filter and enter next Friday’s due date in the To field and select Apply
5. Select the All checkbox to the left of Payee to select and pay all bills due by next Friday
6. The Payment amount, Open Balance less Credit Applied (Vendor Credit), will appear after you select a bill to be paid
7. To pay a different amount, change the Payment amount
8. Select Save and close to save and mark the bills as paid and close the screen
9. Select Schedule payments online to schedule direct payments with your QuickBooks Online Payments account

Note: Vendor credits appear in the Credit Applied column

Behind the Scenes

When you pay a Bill (vendor invoice), QuickBooks decreases (debits) the accounts payable account (Balance Sheet: Current Liabilities) and increases (credits) the credit card account (Balance Sheet: Current Liabilities) by the Bill amount.

Example – A company paid a bill for $100 with a sales tax rate of 6.5% on the account using a Credit Card.

T Accounts:

Note: You can go to a previously created Bill transaction to view the Transaction journal.

To view the Transaction journal:

1. Select the Bill transaction you would like to view.
2. Select More at the bottom of the transaction.
3. Select Transaction journal

Pay Multiple Bills by Check

To pay multiple bills by check:

1. Select New from the left menu, then select Pay Bills
2. The Pay Bills window will appear
3. Select the appropriate checking Payment account and enter or verify the Payment date
4. The Payment account is the account from which you pay the bills. To pay one bill from different accounts (for example, part by check and part by credit card), or to create separate payments on different days, you must enter each partial payment separately
5. Verify or change the Starting check no
6. Check the Print later box if you plan to print the checks later. If you want to print the checks, leave the Print later box unchecked
7. Select the Filter and enter next Friday’s due date in the To field and select Apply
8. Select the All checkbox to the left of Payee to select and pay all bills due by next Friday
9. The Payment amount, Open Balance less Credit Applied (Vendor Credit), will appear after you select a bill to be paid
10. To pay a different amount, change the Payment amount
11. Select Save to save and mark the bills as paid
12. Select Save and close to save and mark the bills as paid and close the screen
13. Select Save and Print to save and mark the bills as paid and print the checks
14. To print the checks later, verify the Print later box is checked and select Save and close to save and mark the bills as paid and close the screen
15. To print the checks, select New from the left menu, then select Print Checks

Note: Vendor credits appear in the Credit Applied column

Print Checks for Bills

To print checks:

1. Select New from the left menu, then Print Checks
2. Select the checks you want to print
3. Insert the number of checks you want to print into your printer. Depending on your laser printer, make sure the checks are facing the correct way to print
4. Select Preview and Print
5. Select Print

Behind the Scenes

When you pay a bill (vendor invoice), QuickBooks decreases (debits) the accounts payable account (Balance Sheet: Current Liabilities) and decreases (credits) the bank account (Balance Sheet: Assets) by the bill amount.

Example – A company paid a bill for $100 with a sales tax rate of 6.5% on account.

T Accounts:

Note: You can go to a previously created Bill transaction to view the Transaction journal.

To view the Transaction journal:

1. Select the Bill transaction you would like to view
2. Select More at the bottom of the transaction
3. Select Transaction Journal

Record Purchase Credits and Refunds

Vendor Credit vs. Refund

A vendor issues credit on purchases on accounts that haven’t been paid.

Note: Some vendors may want to issue a credit on a purchase on your account that has been paid and apply the credit to a future purchase on your account. This goes against the cash management rules. When you allow a vendor to retain your cash for a future payment, you’re in essence giving the vendor an interest-free loan (the vendor has your money but hasn’t earned it). Unless you plan to make a future purchase in the very near future, request the vendor to issue you a refund.

A vendor issues a refund on advanced payment purchases, cash purchases, and purchases on accounts that have been paid. The type of refund depends on the type of payment they received. If you paid with a check, the refund is issued in the form of a check. If you paid with a credit card, the refund is issued in the form of a credit to the credit card you used.

As the purchaser, the vendor issues a purchase credit on purchases on accounts you haven’t paid.

A purchase credit’s issued by the vendor to the credit customer’s account or the credit card account. The credit decreases the customer’s account or credit card account by the credit amount.

In QuickBooks, you record a purchase credit to a customer’s account as a Vendor Credit or a credit card credit as a Credit Card Credit.

Creating Vendor Credits includes:

1. Create a Vendor Credit
2. Make Recurring Vendor Credit
3. Edit a Vendor Credit
4. Void a Vendor Credit
5. Delete a Vendor Credit

Create Vendor Credits

There are situations when a vendor issues you a credit. This usually occurs when you return an item or receive a damaged item created as a Bill and unpaid. When a vendor issues a credit, you create it as a Vendor Credit.

To create a Vendor Credit:

1. Select the new icon (+), then Vendor Credit
2. The Vendor Credit page opens
3. Select the name of the vendor from the Vendor dropdown menu or type the first letter(s) to retrieve the vendor
4. Select Add new if the vendor is not set up. Take the time now to set up vendor details
5. Verify the Mailing address and Payment date
6. Enter the reference number from the vendor credit document in the Ref no. field to identify the vendor credit
7. (Optional) Enter any applicable tags
8. For the Category details, select the account from the Category dropdown menu and enter or change the Description and Amount
9. If you need to add a new account or are unsure what account to classify the expense to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transactions
10. Delete, add, or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
11. (Optional) For the Item details, select any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
12. Select Add new if the product or service is currently not set up
13. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this vendor credit and add any attachments
14. Select Save and new to save your work and start a new vendor credit or Save and close to save the vendor credit and close the window. You can select Save at any time to save your work without leaving the vendor credit

Note: After you create a Vendor Credit, the credit’s automatically applied to the bill when you Pay Bills.

Behind the Scenes

When you create a Vendor Credit, QuickBooks decreases (debits) the amount due to the vendor and the accounts payable account (Balance Sheet: Current Liabilities) and decreases (credits) the asset account (Balance Sheet: Assets) or expense account (Profit and Loss: Expenses) by the credit amount.

Example – A company paid a bill for $100 with a sales tax rate of 6.5% on account. The vendor issued the company a $50 credit.

T Accounts:

Note: You can go to a previously created Vendor Credit transaction to view the Transaction journal.

To view the Transaction journal:

1. Select the Vendor Credit transaction you would like to view
2. Select More at the bottom of the transaction
3. Select Transaction Journal

Make Recurring Vendor Credits

You can create a Recurring Vendor Credit for credits received from a vendor periodically or frequently.

For example, a vendor may extend a fixed credit periodically. By creating a Recurring Vendor Credit, you don’t have to create and record it each period. You can schedule it to be created automatically.

You may receive similar vendor credits frequently. By creating a Recurring Vendor Credit, you don’t have to create and record it every time it’s issued.

You may also receive vendor credits that don’t occur periodically or frequently, but the accounts are numerous, and/or the descriptions are detailed, and it takes time to create it. By creating a Recurring Vendor Credit, you don’t have to take the time to recreate it every time you receive it.

To create a Recurring Vendor Credit:

1. Select the Gear icon on the toolbar, then select Recurring Transactions
2. On the Recurring Transactions page, select New
3. Select Vendor Credit from the Transactions Type dropdown menu and select OK
4. Enter a Template name and choose a Type — Scheduled, Reminder, or Unscheduled

Scheduled

1. What it does: Creates vendor credits according to a schedule you set
2. This type is useful for vendor credits with fixed schedules and amounts

Reminder

1. What it does: Proposes a series of vendor credits according to schedules you set. The vendor credits are not processed until you decide to create and use them. These reminders are found in the Tasks section at the top of the Dashboard page. The Tasks section only appears when you have tasks. The reminders can also be found on the Reminder List
2. How you control it: By selecting on each vendor credit you’ll be able to decide which ones to create, and you can review and edit them first before scheduling them
3. This type is useful for vendor credits with a fixed schedule that need to be edited before they’re created

Unscheduled

1. What it does: It is saved with partial or complete data and without a schedule. Nothing happens to this type of vendor credit until you choose to use it
2. How you control it: Unscheduled transactions don’t have timetables; you use them as needed from the Recurring Transactions list. You select the template and select Use to use it as the starting point for a new vendor credit
3. This type is useful for transactions that contain a lot of detail that you don’t want to retype, but that aren't needed on any set schedule such as complicated vendor credit transactions
4. (Optional) Enter how many days to create in advance
5. Select the name of the vendor from the dropdown menu or type the first letter(s) to retrieve the vendor
6. Select Add new if the vendor is not set up. Take the time now to set up vendor details
7. Select the interval for the Recurring transaction
8. This dictates when and how often the transaction will take place
9. (Optional) Select Start date and End (None, By, or After) to start and end the recurring expense
10. Verify the Mailing address
11. (Optional) Enter any applicable tags
12. For the Category details, select the expense account from the Category dropdown menu and enter or change the Description and Amount
13. If you need to add a new account or are unsure what account to classify the purchase to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transactions
14. Delete, add or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
15. (Optional) For the Item details, select or add any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
16. Select Add new if the product or service is currently not set up. All fields must be entered for Scheduled templates. For example, if an item has a rate of $0, enter 0. If left blank, the line will not save
17. It is not necessary to fill in every field for Reminder or Unscheduled templates. Enter just the data to be repeated in each occurrence. You'll be able to edit each occurrence before it’s actually created
18. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this expense and add any attachments
19. Select Save template

Note: You can make a Recurring Vendor Credit template from any existing vendor credit. To make a Recurring Vendor Credit template from an existing vendor credit, open an existing vendor credit and select Make Recurring at the bottom of the page.

Edit a Vendor Credit

To edit a Vendor Credit:

1. Select the Search icon, then Advanced Search
2. Select Vendor Credit from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search
4. Scan the vendor credit transaction matches and select the transaction to edit
5. Edit the transaction
6. Select Save and close

Void a Vendor Credit

You can’t void a Vendor Credit

Delete a Vendor Credit

To delete a Vendor Credit:

1. Select the Search icon, then Advanced Search
2. Select Vendor Credits from the All Transactions dropdown menu
3. Enter the vendor in the Enter Vendor field and select Search
4. Scan the vendor credit matches and select the desired transaction to delete
5. In the Vendor Credit window, select More at the bottom of the window and then select Delete
6. Select Yes to confirm that you want to delete the transaction. Once you delete a vendor credit, only the Audit log maintains a record of it. To open the Audit log, from the left menu, select Reports and enter Audit log in the search bar

Vendor Credit Card Credit

Creating Credit Card Credits include:

1. Create a Credit Card Credit
2. Make Recurring Credit Card Credits
3. Edit a Credit Card Credit
4. Void a Credit Card Credit
5. Delete a Credit Card Credit

Create a Credit Card Credit

To create a vendor credit card refund:

1. Select New from the left menu, then select Credit Card Credit
2. The Credit Card Credit page opens
3. Select the name of the Payee from the dropdown menu or type the first letter(s) to retrieve the vendor and select the appropriate Bank/Credit account
4. Select Add new if the vendor is not set up. Take the time now to set up details
5. Enter the Payment date
6. Enter the reference number from the credit document in the Ref no. field to identify the credit card credit
7. (Optional) Enter any applicable tags
8. For the Category details, select the account you use to track cash back rewards from the Category dropdown menu and enter or change the Description and Amount
9. If you need to add a new account or are unsure what account to classify the credit to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transactions
10. Delete, add or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
11. (Optional) For the Item details, select any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
12. Select Add new if the product or service is currently not set up
13. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this credit card credit and add any attachments
14. Select Save and new to save your work and start a new credit card credit or Save and close to save the credit card credit and close the window. You can select Save at any time to save your work without leaving the credit card credit

Behind the Scenes

When you create a vendor credit card refund, QuickBooks decreases (debits) the credit card account and decreases (credits) the asset account (Balance Sheet: Assets) or expense account (Profit and Loss: Expenses) by the refund amount.

Example – A company paid a bill for $100 with a sales tax rate of 6.5% by credit card. The company returned the item, and the vendor issued the company a full refund.

T Accounts:

Note: You can go to a previously created Credit Card Credit transaction to view the Transaction journal.

To view the Transaction journal:

1. Select the Credit Card Credit transaction you would like to view
2. Select More at the bottom of the transaction
3. Select Transaction journal

Make Recurring Credit Card Credits

You can create a Recurring Credit Card Credit for credits that occur periodically or frequently.

For example, you may receive credit card credits periodically for a fixed amount. By creating a Recurring Credit Card Credit, you don’t have to create and record it each period. You can schedule it to be created and recorded automatically.

You may frequently receive credit card credits that contain similar content. By creating a Recurring Credit Card Credit, you don’t have to create it every time you receive it.

You may also receive credit card credits that don’t occur periodically or frequently, but the accounts are numerous, and/or the descriptions are detailed, and it takes time to create it. By creating a Recurring Credit Card Credit, you don’t have to take the time to recreate it every time you receive it.

To create a Recurring Credit Card Credit:

1. Select the Gear icon on the toolbar, then select Recurring Transactions
2. On the Recurring Transactions page, select New
3. Select Credit Card Credit from the Transactions Type dropdown menu and select OK
4. Enter a Template name and choose a Type — Scheduled, Reminder, or Unscheduled.

Scheduled

1. What it does: Creates transactions according to a schedule you set
2. This type is useful for Credit Card Credits with fixed schedules and amounts

Reminder

1. What it does: Proposes a series of credit card credits according to schedules you set. The credit card credits are not processed until you decide to create and use them. These reminders are found in the Tasks section at the top of the Dashboard page. The Tasks section only appears when you have tasks. The reminders can also be found on the Reminder List
2. How you control it: By selecting on each credit card credit you’ll be able to decide which ones to create, and you can review and edit them first before scheduling them
3. This type is useful for Credit Card Credits with a fixed schedule that need to be edited before they’re created

Unscheduled

1. What it does: It is saved with partial or complete data and without a schedule. Nothing happens to this type of credit card credit until you choose to use it
2. How you control it: Unscheduled transactions don’t have timetables; you use them as needed from the Recurring Transactions list. You select the purchase and select Use to use it as the starting point for a new credit card credit
3. This type is useful for transactions that contain a lot of detail that you don’t want to retype, but that aren't needed on any set schedule such as complicated purchases that need to go to different vendors
4. (Optional) Enter how many days to create in advance
5. Select the name of the payee from the dropdown menu or type the first letter(s) to retrieve the payee and select the credit card account from the dropdown menu
6. Select Add new if the payee is not set up. Take the time now to set up payee details
7. Select the interval for the Recurring transaction
8. This dictates when and how often the transaction will take place
9. (Optional) Select Start date and End (None, By, or After) to start and end the recurring credit card credit
10. (Optional) Enter any applicable tags
11. For the Category details, select the expense account from the Category dropdown menu and enter or change the Description and Amount
12. If you need to add a new account or are unsure what account to classify the purchase to, select Ask My Accountant account. When your accountant reviews your bookkeeping, they will communicate the proper category for each Ask My Accountant transactions
13. Delete, add, or clear all lines as necessary. To delete a line, select the trash can icon to the right of the line. To add one line, select the line and the + icon. To add 4 lines, select Add lines. To clear all lines, select Clear all lines
14. (Optional) For the Item details, select or add any Product/Service(s) from the dropdown menu, change, enter or select the Description, quantity (QTY), Rate, and Amount
15. Select Add new if the product or service is currently not set up. All fields must be entered for Scheduled templates. For example, if an item has a rate of $0, enter 0. If left blank, the line will not save
16. It is not necessary to fill in every field for Reminder or Unscheduled templates. Enter just the data to be repeated in each occurrence. You'll be able to edit each occurrence before it’s actually created
17. Enter any memo item that you want to appear in the Register (or Account history) and on reports that include this credit card credit and add any attachments
18. Select Save template

Note: You can make a Recurring Credit Card Credit template from any existing credit card credit. To make a Recurring Credit Card Credit template from an existing credit card credit, open an existing credit card credit transaction and select Make Recurring at the bottom of the page.

Edit a Credit Card Credit

To edit a Credit Card Credit:

1. Select the Search icon, then Advanced Search
2. Select Credit Card Credit from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search
4. Scan the credit card credit transaction matches and select the transaction to edit
5. Edit the transaction
6. Select Save and close

Void a Credit Card Credit

To void a Credit Card Credit:

1. Select the Search icon, then Advanced Search
2. Select Credit Card Credits from the All Transactions dropdown menu
3. Enter the Payee in the Enter Payee field and select Search
4. Scan the Credit Card Credit transaction matches and select the Credit Card Credit to void
5. Select More, then Void
6. Select Yes to confirm that you want to void the transaction, then select Save and close

Delete a Credit Card Credit

To delete a Credit Card Credit:

1. Select the Search icon, then Advanced Search
2. Select Credit Card Credit from the All Transactions dropdown menu
3. Enter the payee in the Enter Payee field and select Search
4. Scan the credit card transaction matches and select the transaction to delete
5. In the Credit Card Credit window, select More at the bottom of the window, then select Delete
6. Select Yes to confirm that you want to delete the transaction. Once you delete a credit card credit, only the Audit log maintains a record of it. To open the Audit log, from the left menu, select Reports and enter Audit log in the search bar

Vendor Refunds

There are situations when a vendor issues you a refund. This usually occurs when you return an item or receive a damaged item paid with a check. Therefore, you need to offset the account used to create the purchase for the amount of the refund.

Vendor Check Refund

To create a vendor check refund:

1. Select New from the left menu, then Bank Deposit
2. The Bank Deposit page opens.
3. Select the bank account from the Account dropdown menu and verify the Date
4. Under Add funds to this deposit, select the vendor from the Received From column drop down menu or type the first letter(s) to retrieve the vendor
5. Select the account from the Account column dropdown menu or type the first letter(s) to retrieve the account
6. Enter a Description, select a Payment Method, and enter a Ref no. and Amount
7. Enter any memo item you want to appear in the Register (or Account history) and on reports that include this refund and add any attachments
8. Select Save and close
9. To print the bank deposit slip, select Print, then Print deposit slip and summary, then Print

Behind the Scenes

When you create a vendor check refund, QuickBooks increases (debits) the bank account and decreases (credits) the asset account (Balance Sheet: Assets) or expense account (Profit and Loss: Expenses) by the refund amount.

Example – A company paid a bill for $100 with a sales tax rate of 6.5% by check. The company returned the item, and the vendor issued the company a full refund.

T Accounts:

Note: You can go to a previously created Vendor Check Refund transaction to view the Transaction journal.

To view the Transaction journal:

1. Select the Vendor Check Refund transaction you would like to view
2. Select More at the bottom of the transaction
3. Select Transaction journal

Email Purchases and Payments Reports

Daily, weekly, monthly, quarterly, and annual purchases and payments reports should be emailed to personnel who use purchases and payments report information. See QuickBooks Report Email Schedule Chapter 7: Communicating Business Performance.