Create a Bill
Record what you owe a vendor, with line items, expense accounts and a due date. You can also send the assistant a photo of the bill.
A bill records what you owe a vendor before you pay it. Recording one debits the expense accounts on its lines and credits Accounts Payable.
Under accrual accounting, a cost belongs to the period you incurred it, not the month you paid. A December invoice paid in January is a December expense.
Entering a bill
- Choose the vendor
Pick one under Bill from, or add a new vendor from the picker. Add vendor's bill # records their invoice number.
- Set the dates
The bill date is when you incurred the cost and decides its period. Pick Terms and the due date follows. The due date drives A/P aging.
- Add line items
Each line needs an account. If one supplier invoice covers materials and equipment rental, put each on its own line with its own account.
- Attach the paperwork
Add the supplier's invoice or receipt. You can attach it before you record the bill.
- Record
Record bill posts it to Accounts Payable. Or give the assistant a photo or PDF of the bill and it drafts the entry, asking for approval by default.
Bill or bank transaction?
If you paid on the spot, by card or instant transfer, there's nothing payable. Categorize the bank transaction. Entering a bill as well would count the cost twice.
Enter a bill when there's a gap between incurring a cost and paying it. That gap is what accounts payable records.
When a purchase is a fixed asset
Something that lasts beyond this year, such as a vehicle or major equipment, is a fixed asset. It goes on the balance sheet and its cost is spread over its useful life through depreciation. Expensing it understates this year's profit and overstates later years'.
Good to know
- Bills can be paid in part. The rest stays open and keeps aging.
- The private memo is internal. Lejr doesn't send bills to anyone; a bill is your record of the vendor's invoice.