Keep Up With Payables: Paying Bills in QuickBooks

It’s not your favorite accounting task, but QuickBooks makes bill-paying easier.

Last month, we described the process of entering bills in QuickBooks. We discussed how you can’t pay bills without first entering them (Vendors | Enter Bills). We went over the steps required to memorize them to save time and repetitive data entry. And we discussed the importance of using Reminders if you’re going to memorize bills.

QuickBooks provides templates that you can use when you’re entering bills. You have to complete these forms before you can apply payment.

This month, we’ll discuss the next step: paying your bills. Click Pay Bills on the home page or open the Vendors menu and select Pay Bills. The screen that opens displays bills that you’ve entered that need to be paid. You can choose to list those due on or before a date you specify or all bills. 

By default, all vendors are represented in the table. If you want to only see bills from one specific vendor, click the down arrow in the Filter By field and select he correct one. You can also sort the list by any of a number of criteria, including Due Date, Vendor, and Amount To Pay by clicking the down arrow in the Sort By field.

Once the table is displaying your bills the way you want, it’s time to select the ones you want to pay. You can either click in the box in front of each to make a checkmark or click on Select All Bills below the table. When you select one, the Amount To Pay field will change to reflect the Amount Due. If you can’t afford the whole payment, replace the 0.00 in the Amount To Pay field with your actual planned payment.

You can select individual bills to pay in QuickBooks or click on Select All Bills below the table.

QuickBooks provides additional information in the table of bills to be paid beyond Date Due, Vendor, and Amount To Pay. You’ll see a column for a reference number, but there are other columns that can display vendor-issued discounts and credits that could be applied to individual bills. Vendors sometimes offer discounts for early payment, for example, and credits can be issued to settle things like returns or overpayment.

Warning: If you’ve never worked with discounts and credits, we can help you learn about them, create them, and apply them. It’s complicated.

When you’re satisfied with the information in the table, look below it. Highlight a bill by clicking on it to see what your options are there. You can click Go to Bill to see the original form. If there are discounts or credits available, they will appear there as Sugg[ested] Discount and Total Credits Available. You’ll also notice that any discounts or credits will have been applied in the table above. To change these, click Set Discount or Set Credit.

Make sure the payment Date is correct and select the payment Method. If you select Check, you’ll have to choose between To be printed or Assign check number (for handwritten checks, you’ll be able to specify the number or let QuickBooks assign it in the next window). Select the correct payment Account and click Pay Selected Bills. A Payment Summary appears in the window that opens. You can either click Pay More Bills or Done. If you’re paying bills using more than one payment method, you’d go back to the previous screen and repeat the process.

The lower half of the Pay Bills window

Helpful Automation

As you saw in this example, QuickBooks applied discounts and credits automatically when you selected a bill. To set this up, open the Edit menu and select Preferences, then Bills. Click on the Company Preferences tab, which opens the screen for company-wide preferences that are established by the Administrator. 

Click in the boxes in front of Automatically use credits and Automatically use discounts. Then click on the down arrow in the field next to Default Discount Account to open the list. There should be an Income account labeled Discounts. Select this one, then click OK. 

QuickBooks provides three reports that help prevent bills from slipping through the cracks. Open the Reports menu and go to Vendors & Payables, then A/P Aging Summary and Detail, and Unpaid Bills Detail. If you’re running into problems with your accounts payable workflow and want some guidance on that or any other element of QuickBooks, we’d be happy to work with you.

How Do You Add Users in QuickBooks Online?

 If you have one or more people besides yourself using QuickBooks Online, you’ll need to know how to set up their accounts.

Your QuickBooks Online file contains a great deal of very sensitive information, like customers’ credit card numbers and employees’ Social Security numbers – data you don’t want to have fall into the wrong hands. You obviously trust your employees or you wouldn’t have hired them, but when it comes to security, you should implement all the safeguards you can.

QuickBooks Online can help you stay safe by limiting the access that other users have to your company file. Here’s how it works.

To get started, click the gear icon in the upper right and select Manage users. You should be listed there, of course, as the Master Administrator. Click Add user. The screen that opens will ask you what type of user you’re adding. There are four of them:

• Standard user. You can assign full or limited access to standard users, but they won’t have administrator privileges.

• Company admin. At this level, the user can see and do everything.

• Reports only. These individuals have access to all reports except those that contain payroll or contact information.

• Time tracking only. You’d assign this type to employees who only need to enter their own timesheets. 

The first step in adding a user in QuickBooks Online is to specify their type.

The first two count toward your user limit, but the second two do not. Make your selection and click Next. We’ll select standard user for this example. 

On the screen that opens, you’ll be assigning actual access rights, telling QuickBooks Online what the user’s restrictions are. You can choose All (with or without payroll access), None (allows some activities), or Limited. Select Limited, then click in the box in front of Customer to create a check mark. You’ll see the list of specific actions that that individual can take (like creating invoices, sales receipts, and statements) and the screens that they can see (customer registers and reports, tax rates and agency settings, etc.). 

There’s also a list of what they can’t do, including printing checks, viewing bank registers, and preparing a sales tax return.

Click in the box in front of Customer again to uncheck it and select Vendor. You’ll see a similar list here of what your new user can and can’t do, only its activities relate to your accounts payable.

QuickBooks Online provides lists of what standard users can and can’t do and see for both customers and vendors.

Click Next  If the user will be entering his own her own timesheets in QuickBooks Online, click the button in front of Yes, then select the correct name from the drop-down list. Click Next. Answer the user settings questions on the next screen and click Next. Enter the user’s name and email address (user ID), then click Save. QuickBooks Online will return you to the Manage Users screen, where you’ll see that your new user has been added to the list. The individual you just invited will receive an email invitation to set up an account, with instructions on how to do so.

Other Security Tips

There are other ways you can keep all of your company’s data safe. Here are some suggestions to consider if your business has returned to its offices.

• Always update your operating system and applications when prompted. These often contain security patches in addition to bug fixes and new features.

• Keep backups out of reach of others. Cloud backups are best, but if you use a local device, don’t leave it out in the open.

• Log out of QuickBooks Online when you’re not at your desk.

• Shred anything you print from QuickBooks Online or store it in a locked drawer.

• Protect your networks. Discourage excessive web browsing by employees. Don’t allow extraneous app downloading on company equipment and ask employees not to use company mobile devices on public networks. Consider network monitoring software if you can’t afford managed IT.

We follow security best practices in our own offices, and we hope you’ll do the same. Applying safeguards proactively will help prevent data theft that can be nearly impossible to recover from. 

Intuit employs industry-standard security practices to keep your data safe, too, and it handles all backup and upgrades. Often, those updates include new features, like the recent addition of transaction “tags.” Let us know if you need our help with these or with any other element of QuickBooks Online.