The other day I was helping a treasurer with a bookkeeping issue in QuickBooks, and I noticed they entered all their expenses through Checks. I had always used Bills and never Checks so I didn’t know what was up with that. Who was doing it correct? Was it possible we were both doing it correct? And what about Expenses? When is it good to use that?
Here’s what I found out. The video shows the differences:
- Bills: This is for those that are doing accrual accounting because you can post the expense (Bill Date) separately from the payment (Check Date). This also makes it easier to enter a batch of invoices and then not pay them until the due date gets closer. Bills also works with QuickBooks electronic payment services as well as checks.
- Expenses: Works best for cash basis accounting (expense is posted the date the payment is made). I would only use this for electronic payments the vendor initiates.
- Checks: If I didn’t print checks but instead hand wrote them, I’d use checks. Again, it also works for cash basis accounting. I also use it when I need to cut a check with a special note in the memo.