Recording Expenses in QuickBooks Online

Managing expenses incurred by a business is one of the primary reasons why many businesses decide to use QuickBooks. Most businesses know when they are generating income, but when it comes to where their money is going, it’s a whole different story. For a business to be profitable, it must be able to control expenses that directly affect the bottom line.

In this chapter, we will show you four ways to record expenses, also known as money-out transactions: (1) entering and paying bills, (2) managing recurring expenses, (3) writing and printing checks, and (4) capturing and categorizing receipts and bills.

Entering a bill is ideal for suppliers who have extended credit to you. You receive your purchases immediately and payment is due sometime in the future. However, expenses that require immediate payment should be paid via check. Entering a check allows you to record both the expense and the payment at the same time.

Using...

Entering and paying bills

For purchases made on account, entering bills into QuickBooks and paying them a few days before they become due is the best way to manage your cash flow. If you enter bills into QuickBooks as you receive them, you can run reports that will show you which bills are due, or are nearly due, so that you can plan ahead and ensure you have sufficient cash on hand to pay them. Unpaid bills are also referred to as accounts payable, or A/P for short. In the following sections, we will first cover how to enter bills, and then we will discuss how to pay a bill in QuickBooks Online (QBO).

Pro Tip: There are a number of apps available to help automate the bill entry process. From the left navigation bar, select Apps. In the search box, type the keyword bill pay and several options such as Bill Pay for QuickBooks Online and bill.com will display. To learn more about the Intuit Apps marketplace, refer to Chapter 16, Finding Apps and Handling Special Transactions...

Managing recurring expenses

In this section, we will show you how to create a template for recurring (repeat) expenses. Most businesses purchase goods and services from the same vendors. For example, rent and utilities are examples of recurring expenses that are generally paid monthly. Instead of creating these expenses from scratch each month, you can create a recurring expense, which is a template you can save with the vendor, amount, account, and other pertinent information.

When you are ready to pay a recurring expense, you can schedule the expense to be recorded automatically on a certain day. You can manually generate the expense when you need to pay it, or have QuickBooks send you an alert when it’s time to make a payment. Using recurring expense templates will save you time and will reduce the amount of manual data entry required.

Follow these steps to create a recurring expense in QuickBooks:

1. Navigate to the gear icon and select Recurring Transactions...

Writing checks

So far, we have discussed how to pay expenses by entering them as bills and paying them at a later date, and how to set up recurring expenses. A third way in which you can record expenses for your business is by writing checks. The benefit of writing checks directly in QuickBooks is that you don’t have to waste time manually writing a check. Instead, you can create checks and print them directly from QuickBooks. This is ideal for vendors that typically don’t accept debit or credit card payments.

Follow these steps to write checks in QuickBooks Online:

1. Click on the + New button and select Check in the Vendors column, as indicated in Figure 8.15:

Figure 8.15: Navigating to Check

2. The following screenshot shows the fields of information to be completed in the Check form:

   

   Figure 8.16: Completing the Write Checks form

   The following is a brief description of the information in the Check form:

   • Payee...

Printing checks

In order to print checks, you must purchase check stock that is compatible with QuickBooks Online. You can order checks from a variety of places, such as your financial institution, or directly from Intuit. Visit the Intuit Checks and Supplies (https://intuitmarket.intuit.com/checks) website to learn more.

Follow these steps to print checks:

1. Click on the + New button and select Print Checks in the Vendors column, as indicated in Figure 8.18:

Figure 8.18: Navigating to Print Checks

2. Follow these steps on the next screen to ensure that your printer is set up properly:

   

   Figure 8.19: Selecting the check type for printing checks

   The following is a brief description of the steps:

   1. Select the type of checks you use: There are two types of checks, Voucher and Standard. The Voucher check includes one check per page, and two printed vouchers (one for you and one for the payee). The Standard check has three checks per...

Editing, voiding, and deleting expenses

Like most transactions in QuickBooks, you can edit bills up until they are paid. However, after you have paid a bill you will need to either record a credit memo if you overpaid or request a new bill if you underpaid. To edit a bill, you need to go to the Vendor Center, select the vendor, and then click on the bill you wish to make changes to. After making the necessary changes, save the bill and close out of it. You can also edit checks in a similar manner. As long as you have not printed the check, you can make any changes necessary. Navigate to the check register, locate the check, and make the necessary changes. After you have printed a check, you will need to void it if it is incorrect. From the check register, select the check that needs to be voided. Click the Edit option and the check will display on your screen. At the very bottom of the page, you will see a tab that says More, click on it and the following menu will appear:

...

Capturing and categorizing receipts and bills

Receipt capture allows you to attach receipts and bills to transactions in QuickBooks. As a result, you will be able to quickly access source documents when needed. This feature works in two different ways. First, you can attach receipts and bills to transactions previously entered into QuickBooks Online. Second, you can use a receipt capture to record a transaction for the first time. Of course, you can use both methods interchangeably.

Perform the following steps to capture a receipt or bill:

1. Navigate to Banking (or Bookkeeping | Transactions, if you are in the Business view) and select Receipts.
2. The following screen will appear. (Make sure you are on the Receipts tab, as indicated here):

   

   Figure 8.21: Uploading receipts to QBO

   There are three options available to capture receipts:

   • Upload from computer: If the bill or receipt is saved to your computer, select this option and navigate to where...

Summary

In this chapter, we have shown you how to enter and pay your bills, how to enter vendor credits, how to manage recurring expenses, how to write checks, and how to print checks. We also covered the three ways in which you can upload bills and receipts to QuickBooks.

As a result, you will be able to stay on top of your cash outflow.

In the next chapter, we will show you how to reduce or eliminate the need to manually enter bank and credit card transactions by uploading transactions automatically into QuickBooks using bank feeds.

The primary difference between expense transactions and bank feed transactions is that expense transactions are typically entered manually through bills, checks, recurring expenses, and receipt capture, whereas bank feeds do not require manual data entry. Instead, your bank account is connected to QuickBooks and bank transactions automatically “feed” into the Banking Center in QuickBooks, saving you time.

Learn more on Discord...