How to Record and Pay Bills in QuickBooks Online

Recording a bill in QuickBooks Online means logging what you owe a vendor before you pay it, so your accounts payable balance stays accurate and due dates don't slip. Paying the bill marks it as settled, records the outgoing payment against the correct bank account, and clears it from your accounts payable automatically.

There's a difference between sending money and knowing you owe it. Bills in QuickBooks Online let you capture both. Enter the bill when it arrives, pay it when it's due, and keep a running view of what's outstanding at any point in the month. Here's the full process.

What Is the Difference Between a Bill and an Expense in QuickBooks Online?

Understanding this distinction prevents one of the most common bookkeeping errors in QBO.

A bill is something you owe a vendor but haven't paid yet. It goes into accounts payable as a liability and stays there until you pay it. Use bills for any vendor invoice that comes with payment terms (Net 30, Net 15, due on receipt, etc.).

An expense is something you've already paid at the time of purchase, by credit card, debit, or cash. It's recorded immediately and doesn't go through accounts payable.

If you record a bill as an expense (or the other way around), your accounts payable balance will be wrong and your cash flow picture will be off.

How Do You Enter a Bill in QuickBooks Online?

You enter bills manually through the + Create menu. If you receive bills as PDFs, you can also upload them and QBO will extract the details automatically.

Step-by-step: Entering a bill manually

1. Click + Create, then select Bill.
2. In the Vendor dropdown, select the vendor. If they're not in your list yet, click + Add new to create them.
3. Set the Terms (Net 15, Net 30, etc.) and enter the Bill date, Due date, and Bill no. exactly as they appear on the vendor's invoice.
4. In the Category details section, select the expense account this bill belongs to (e.g., Rent, Utilities, Professional Services).
5. Enter the Amount.
6. (Optional) Add a memo with extra notes if you want a record beyond the Bill no. you already entered.
7. Click Save and close.

The bill now appears in your accounts payable and under All apps > Expenses and Bills > Bills.

Step-by-step: Uploading a bill from a PDF

1. Go to All apps > Expenses and Bills > Bills.
2. Click the Add bill dropdown and select Upload from computer.
3. Drag and drop your PDF or image file into the upload window.
4. QBO reads the bill and fills in the vendor, date, amount, and due date automatically.
5. Review the extracted details for accuracy, assign a category, then click Save.

How Do You Pay Bills in QuickBooks Online?

Paying a bill records the outgoing payment and clears the bill from your accounts payable. You can pay one bill at a time or select multiple bills to pay in a single batch.

Step-by-step: Paying bills

1. From your Dashboard, go to Expense & Pay Bills, then select Pay Bills.
2. In the Payment account dropdown, select the bank account you're paying from.
3. Set the Payment date.
4. A list of all open bills appears. Check the boxes next to the bills you want to pay now.
5. Review the amounts in the Payment column. You can enter a partial payment if you're not paying the full balance.
6. Click Save and close.

QBO records the payment, reduces the bill balance to zero (or to the remaining amount if partially paid), and posts the transaction to your bank register. When the payment appears in your bank feed, QBO will match it to this record automatically.

If you're paying by check from a checking or savings account, you can enter a Starting check no. when you select the Payment account on the Pay Bills screen.

How Do You See What Bills Are Still Outstanding?

Your open bills are visible in two places. For a quick list, go to All apps > Expenses and Bills > Bills and filter by Open. For a detailed aging view that shows how long each bill has been outstanding, run the Accounts Payable Aging Summary report.

To run the report: go to Reports, then Standard reports. In the Who you owe section, select Accounts payable aging summary. Bills are grouped by how long they've been unpaid. Current, 1-30 days, 31-60 days, and so on. Anything in the 31+ column needs attention.

Running this report weekly keeps overdue vendor payments from accumulating and protects your vendor relationships.

FAQ

What happens when my bank feed downloads a payment I already recorded as a bill payment in QBO? QBO will recognize the payment in your bank feed and suggest a match to the bill payment you already entered. Select Match to link them, don't click Add, which would record it as a second, duplicate payment.

Can I pay multiple bills from different vendors at once? Yes. The Pay Bills screen shows all open bills regardless of vendor. Check the boxes for whichever bills you want to pay and QBO will group the payment correctly by vendor in your records.

What if I receive a vendor credit instead of a bill? Enter it as a Vendor credit (under + Create > Vendor credit). When you go to pay future bills from that vendor, QBO will apply the credit automatically and reduce the amount due.

How do I record a bill payment made with a credit card instead of a bank account? In the Pay Bills screen, change the Payment account dropdown from your bank account to the credit card account you used. QBO records the payment against the credit card balance instead of your checking account.

Can I attach the vendor's invoice PDF to the bill in QBO? Yes. When you're on the bill entry screen, scroll to the bottom and select Attachments. Upload the PDF there so the original document is stored directly with the bill record.

Key Takeaways

• Use a bill for anything you owe but haven't paid yet. Use an expense for purchases paid immediately. Mixing them up skews your accounts payable and cash flow.
• Enter bills through + Create > Bill or upload PDFs directly from the Bills screen. QBO extracts vendor, date, and amount from uploaded files.
• From your Dashboard, go to Expense & Pay Bills. Select the payment account, check the bills you're paying, and save.
• When the payment downloads from your bank feed, match it to the existing bill payment record, don't add it as a new transaction.
• Run the Accounts Payable Aging Summary report weekly to stay on top of what's due.

Still have questions?

Leave a comment below or go to Help (?) in QBO and select Contact us for account-specific support.

Helpful Resources

• Enter bills in QuickBooks Online: Official step-by-step guide for entering bills manually or by PDF upload.
• Pay bills in QuickBooks Online: Official step-by-step guide for selecting and recording bill payments.
• How to Pay Bills Faster in QuickBooks Online: A short video walkthrough for streamlining your bill payment workflow.
• How to Connect Your Bank and Categorize Transactions in QuickBooks Online: How bill payments appear in your bank feed and how to match them correctly so you don't end up with duplicates.