QuickBooks has performed an excellent job making double-entry accounting accessible to many individuals. But typically folks nonetheless get confused over the terminology. One space of confusion is the distinction between Invoices and Bills in QuickBooks. In our day-to-day interactions we might use these phrases interchangeably, however in QuickBooks they imply fully various things.
Invoices in QuickBooks
"Invoices" are accessed by following this path:
Customers> Create Invoices
"Invoices" are despatched to prospects. They report income (gross sales) on the books, and they report that prospects owe the sum of money that seems on the bill.
There is a fee display screen related to invoices, the place buyer funds are recorded. Recording funds on this display screen exhibits that the buyer owes much less cash, and additionally information that extra cash has been acquired. The fee display screen for buyer invoices known as "Receive Payments," and is accessed by following this path:
Customers> Receive Payments
First, invoices are generated utilizing the Create Invoices display screen. Then, as funds are obtained from prospects, the funds are utilized in opposition to the invoices by utilizing the Receive Payments display screen.
Bills in QuickBooks
"Bills" are accessed by following this path:
Vendors> Enter Bills
"Bills" are obtained from distributors. They report bills (or prices or stock), and they report that the enterprise owes the vendor the sum of money that seems on the invoice.
There is a fee display screen related to the payments, the place funds made to distributors are recorded. Recording funds on this display screen exhibits that the enterprise owes the vendor much less cash, and additionally information that there’s much less money by paying the vendor. Or, if the vendor invoice was paid with a bank card, this display screen exhibits that there’s extra bank card debt on the books. The fee display screen for vendor payments known as "Pay Bills," and is accessed by following this path:
Vendors> Pay Bills
When vendor payments are obtained, they’re entered utilizing the Enter Bills display screen. Then, as they develop into due, they’re paid utilizing the Pay Bills display screen.
Home Page Confusion for Bills and Invoices
Starting with QuickBooks 2006, Intuit added a Home Page. Access it by following this path:
Company> Home Page
In the Home Page, QuickBooks graphically exhibits how cash ought to movement by the enterprise.
One level of confusion on the Home Page is the place the arrow goes from Enter Bills, right down to Invoices. Although the arrow is a lighter coloration than different arrows, if persons are not conscious of the distinction between payments and invoices, it might appear that invoices should be created after getting into payments. However, for many customers this isn’t the case.
When to Create a Customer Invoice After Entering a Vendor Bill
Users solely have to create a buyer bill after getting into a vendor invoice in a single particular occasion: when there have been bills on the vendor invoice that must be invoiced to a particular buyer. For instance, if there are reimbursable bills (direct cross-by with no markup), or different bills requiring a markup, these might be marked Billable in the Enter Bills display screen, and put onto a particular buyer's bill.
Once QuickBooks customers perceive the distinction between Bills and Invoices, and how they can be utilized in tandem, many issues might be prevented.