15b Bronze BillsAndCredits
Entering Bills and vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
Presented by: Diane C. O. Gilson President, Info Plus Accounting, Inc. Certified Advanced QuickBooks® Pro Advisor e-mail: [email protected] © Info Plus Accounting, Inc. Ann Arbor, MI 48104 web: www.BuildYourNumbers.com + www.InfoPlusAccounting.com
This session : Getting the Bills into the System
Making the right moves Terminology Entering Bills - The top portion - Discounts & options - Retainage payable -Variance from PO’s Vendor credits and pre-payments After the entry…
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
Pre‐requisite: “You Can Write Your Own Checks Here” workshop
Covered in that workshop (i.e., not to be duplicated here): o Best practices re: when to use Bills and when to use Checks o Entering info into the bottom portion of Bills, Checks and Credit Cards o Detailed info on checking styles, check ordering, check printing, safeguarding of checking account funds, etc. o Check vouchers, check signing and mailing, and filing of support for checks and bills
Terminology
Is it a “Bill” or an “Invoice”? o To your vendor, it’s an Invoice (i.e., a Receivable) o To you, it’s a Bill (i.e., a Payable) or a “Vendor Invoice” o So if you’re “Invoicing”, what are you doing? Bill Credit o Is designed to offset a Bill (paid or unpaid). It’s considered to be a separate transaction entered as of a different date. Item Receipt o You’ve received Inventory or other goods, so you know you owe money, but you haven’t yet received the “real” Bill from the vendor. Retainage payable o Some contracts are designed to withhold a portion of the payment due to a vendor until certain conditions (quality, performance, time, etc.) have been met. (I.e., The expense has been incurred, but funds payable are “retained” by you until a later time. These payables are not normally included on standard A/P Aging reports as they are due at some point in the future). Bill Payment (accomplished via “Pay Bills”) o Although Bill Payments are printed on checks, a Bill Payment in QB is not classified or identified as a “Check”. It’s a separate type of transaction called Bill Payment and the bottom portion of a Bill Payment “check” is significantly different than the bottom portion shown for a regular “Write Check” screen. “Paid” vs. “Unpaid” Bills o A Bill will display and/or show on reports as “Paid” only after: It has been totally paid AND After it has been linked to the payments “assigned” to the Bill.
Accrued Expenses (in‐depth coverage in “Year‐end deep‐dive” workshop) o In spite of the word “Expenses” in the title, “Accrued Expense” accounts are short‐term liabilities. They are used to recognize known or estimated liabilities (and related costs) at the end of an accounting period that are not reflected in Accounts Payable or other liability accounts.
© Info Plus Accounting (may not be used or re-printed without permission)
Page 1
Entering Bills & Vendoor Credits: “Just the bassics, m’aam m.” (And there are quitee a few!)
Entering Bills – the top portio on
1. Billl or Credit se election o Typicallyy a Bill o Bill Credits covered laater in class 2. A//P Account n one Accountts Payable acccount o This choice will appeaar only if you’’ve establisheed more than o Re: 2nd Accounts Payyable accountt: May be creatted if you nee ed to see Balaance Sheet reports that show Accounts Payable segregated to s o: “Related”” companies (i.e., other coompanies owned by the saame owner(s)), The owne er(s) Another “set” of speciific vendors. Although this A s option is avaailable, and c an be helpfull for very specific circumsttances, we urge caut w ion and seldo om recomme nd it becausee: It’s easy tto enter Bills to the wrongg A/P accountt You can’tt split Bills bettween A/P acccounts When you Pay Bills, (o or look at the Pay Bills screeen to see wh hat you owe) you need to select,, and be very alert regardinng: Whicch A/P accoun nt you’re view wing or payingg Bills from Not o overlooking B Bills payable inn an alternatee account Unless yo ou filter to show a specific A/P account, Accounts Paayable Aging Reports comminggle all vendorss into one repport. Retainage payable? We’ve se een some ProA Advisors sugggest using an additional A//P account fo or Retainage e Payable, bu ut we believe we have a beetter, and eassier, solution (discussed later in th his class) oose to establish Suggest N NOT making it a sub‐accou unt (to avoid having If you DO cho your regular A y A/P balance sshowing up a s “Accounts PPayable‐Otheer”)
© Info Plus Accounting (may not be used or re-prin nted without p permission)
Page 2
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
3. “Bill Received” box o When the box at the top of a normal “Enter Bills” screen is not checked, it becomes an Item Receipt (the window transforms into “Create Item Receipts). If you have the Company Preference/Items & Inventory/Inventory and purchase orders active box checked, you can also access this screen from: The Vendor drop down menu or An icon shown on the Home screen When to use an Item Receipt Typically used for inventory received without a final Bill. Ideal for inventory/warehouse situations so that people using, or selling, inventory can tell that an Inventory Item has arrived and is available for use or sale. Could be used for other costs incurred but without Bills in hand BUT Item Receipts can be a bit “tricky” (see scenarios below) so the decision to use them should be thoroughly thought through. If you decide to use them, procedures and control processes should be implemented to avoid negative consequences. Financial impact of an Item Receipt An Item Receipt is often created from an existing Purchase Order so that the agreed‐upon Price is copied into the Item Receipt as the cost (e.g., $1,500.00). The date of the Item Receipt is usually entered as the date that the warehouse or shop actually receives the Item (e.g., Feb 2, 20xx). Accounts Payable and the Aging Summary is increased for the amount shown on the Item Receipt. NOTE: No “Bill” will appear in the Pay Bills window as a “real” Bill has not yet been received. Converting an Item Receipt into a Bill To convert to a Bill, simply click the Bill Received box and the Item Receipt becomes a Bill. But date and amount issues arise can occur when the real Bill arrives. E.g.,: Has the prior month already been finalized? The real date per the vendor Invoice is January 30th. Do we correct the date? The real amount per the vendor Invoice (including shipping and handling, is $1,572.57). Do we correct the amount in the prior month? No final answers here, but you should be aware of the issues…
© Info Plus Accounting (may not be used or re-printed without permission)
Page 3
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!) 4. Vendor Name o Type first few letters, and if no name is available as a match, complete the name as desired, and tab into the Amount field. o You’ll receive the message that this name doesn’t exist. You can then go to Quick Add or Set Up (if you want the address of the vendor to show on the Check, go to Set Up). o After establishing the Payee’s Name, if you get a pop up screen, it could be because: Open Purchase Orders exist. You’ll then choose whether this Bill will be used to receive against one or more of these orders. Pay for Time Worked. Time has been entered for the Vendor and the screen will ask if you want this bill to represent time worked. If you click on Yes, you’ll be asked to enter the start and end dates. When you press OK, it will bring in the detail from the Time Sheet. Auto Recall. Occasionally you will be asked if you want to fill the transaction with the previous transaction for this vendor. 5. Date: o Costs show up on (accrual‐basis) reports as of: The date entered on the Bill NOT as of the Bill Payment date (for cost reporting purposes, the date that you actually pay a Bill has no impact on the cost results). o Using the right date for Bills In nearly all circumstances you should use the date on the vendor Invoice. NOT the date that you entered the Bill Why? The date of the Invoice should indicate the day that you Actually incurred the cost and Assumed responsibility for paying the Bill Reports should reflect both the cost and liability as of the “effective” date. Exceptions: Bills received after month‐end cutoffs that you were not aware of. These should be date as of the first of the following month with a memo noting the actual date of the Bill. Certain inventory situations where inventory received dates must precede the Sale (invoicing) date. (Inventory is the subject of a totally separate workshop.)
6. Ref. No. o Enter numbers EXACTLY as shown on vendor Invoice. Why? For reference (easier to look up or track through) If anyone attempts to enter another Bill to the same vendor you’ll get a warning screen. This will help to avoid any duplication of entries (nice control!) o Non‐numbered vendor Invoices (phone bills, electric bills, etc.) Come up with a standardized way to enter. E.g.: “m/e 12‐15‐14” Note: Ref. No. must be IDENTICAL for the warning screen to work, so the standardized approach must be strictly adhered to for the control to work.
© Info Plus Accounting (may not be used or re-printed without permission)
Page 4
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!) 7. Amount: o If auto‐recall has filled the field, and it’s different for this Bill, you can change it here, OR wait until you’ve completed the bottom portion of the transaction and click the Recalculate button. 8. Bill Due o If you have NOT set terms for this vendor in the vendor record, this date will auto fill based on the default set in your Company File Preferences. o You can manually change the date if you wish. 9. Terms o You can manually select terms from this drop down menu if you wish. If you do this, when you finalize your Bill entry, QB will ask if you want to keep this set of terms for this vendor. If you say Yes, QB will modify the vendor record to retain this set of terms. 10. If you chose Terms that included a discount, this field will show the applicable Discount Date. 11. Memo on “top” portion of Bill + what will print on Bill Payment Check o Memo: will auto‐fill the vendor account number if you entered it into the vendor record and/or you can manually enter info into the Memo line. o You can enter other info in the Memo section if desired. o If you create a Bill Payment based ONLY on this Bill (i.e., if you don’t pay more than one Bill with that Bill Payment) whatever is shown in this Memo will print in the Memo section on the Bill Payment check. o When the check is printed, the top Memo will print on the actual check, and the Accounts Payable info will print on the voucher (bottom) sections of the Check. Info printed includes: Date of Bill, Type, Reference No., Original Amount of Bill, Balance Due, Discount, and Payment amount for that Bill. The Total of payments made (in the event of paying more than one Bill).
Assigning Bills to Accounts, Items, Jobs etc.
See the “You can write your own checks here” workshop for basic info regarding how to fill out the bottom section of Bills, Checks and Credit cards. Additional considerations that may apply to your Bill entries: o Discounts – optional ways to enter QB way: When you use a discount, you can assign it to an account Pros: Background calculation, discount date noted separate from actual due date. Cons: No ability to assign discounts taken to a job or Item, and missed discounts are not reported (usually exceptionally high interest rates for missed discounts). Enter discount as a separate “offset” split in bottom portion of Bill and use the discount date as the due date (+ modify vendor name to indicate that they are a “discount vendor”). If discount is missed simply delete it from the split. Pros: Can assign discount offset(s) to desired account, job, or Item if desired. Cons: Missed discounts are not reported (usually exceptionally high interest rates for missed discounts).
© Info Plus Accounting (may not be used or re-printed without permission)
Page 5
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
o
o
Enter the Bill net of discount and use the discount date as the due date (+ modify vendor name to indicate that they are a “discount vendor”). If discount is missed, add it back in and assign it to a discounts lost account. Pros: Net cost is assigned to a job, and missed discounts are highlighted in management reports. Cons: Requires some calculations and closer monitoring in order to not miss discounts.
Retainage payable – the easy way Create a Retainage Payable account (Other Current Asset type). Create a one‐sided Item (Service or Other Charge) that links to the Retainage Payable account. To record Bills for which Retainage Payable is being withheld: Enter the full amount of the Bill and job cost appropriately. Use the Retainage payable Item and offset the amount shown as cost on the bottom of the Bill – include the job name. Result: Current Bill to vendor is netted down to proper amount Retainage Payable (non‐Aging Account) shows correct amount payable at a pre‐determined time in the future. When the conditions regarding Retainage payable have been met: Enter a Bill to the vendor using the Retainage Payable Item and the correct due date. Result: The Retainage Payable account is decreased. Accounts Payable are increased and age properly. Note: The Retainage Payable account should be regularly monitored and reconciled. When a Bill is higher than the imported Purchase Order,... The person entering Bills should follow up with the owner or job supervisors – and make the entries as directed (i.e., probably hold off on entry until the overage is understood, discussed, and approved). Additional entries (e.g., entering Change Orders to Estimates, or modifying P.O.s may also be required)
Vendor credits
A Bill credit should be a mirror image of the original Bill to which it relates (i.e., the cost should be netted back against the same Account or Item and job). o You’ll need to research the reason for the credit. E.g.,: Was it a return of materials? An adjustment? A discount? Etc. What Bill does it relate to? What was the original entry? o From the Enter Bills window, click on the “Credit” button at the top of the Bill. The screen will change slightly Enter info just as if the credit was a Bill. Use the Reference Number created by the vendor (if none, enter the original Bill Ref. No. with CR added to the end – or use other descriptive info).
© Info Plus Accounting (may not be used or re-printed without permission)
Page 6
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
Prepayments to vendors
Write a check to the vendor o In the Expenses (Account) tab, choose the Accounts Payable Account. o In the Customer:Job column indicate the Vendor name again (QB will require it) o Results: This creates a vendor credit that can be applied against future Bills from them. Costs are entered into the period incurred based on Invoices and the prepayments can be tracked and “drawn down” as used. As long as a credit exists, it will continue to be visible in your Accounts Payable report (good tracking so that unused payments don’t get lost).
After Bills and credits have been entered into QuickBooks
Physically Stamp vendor Invoices (Bills) and Credits as “Entered”. o Indicate date actually entered. Use an Alpha “Expando” file to hold unpaid Bills for payment o You’ll track what needs to be paid using other QB reports. o Note: After payment, Bills, vouchers and support will be filed in a different place. Cost info entered via Bills is now accessible for Invoicing customers Reports that are dependent on Bills being entered should be up‐to‐snuff.
Next Stage: Processing Bill Payments and Credits …
© Info Plus Accounting (may not be used or re-printed without permission)
Page 7
4/19/2011
**10,450.00
Layers of Stone
Ten Thousand Four Hundred Fifty and 00/100*************************************************************************** Layers of Stone
Layers of Stone Date Type Reference 2345 5/24/2013 Bill 4/19/2014 Bill 5687412
Original Amt. 3,000.00 7,450.00
Balance Due 3,000.00 7,450.00
4/19/2011 Discount
Check Amount
Payment 3,000.00 7,450.00 10,450.00
Voucher Check printed on plain paper: 1. Note that the check number and other printed check info doesn't show on a "plain paper" print. 2. The detail on the vouchers indicates the specifics on Bills being paid so the vendor should apply your payment in the same way that you are paying the Bills. 3. Note that Bill Payment stubs do NOT indicate the accounts or Items that the original Bill was assigned to. 4. The total being paid to the vendor is indicated as the Check Amount on the voucher copy as well as on the Bill Payment check. Checking, MyTown B
Layers of Stone Date Type Reference 5/24/2013 Bill 2345 4/19/2014 Bill 5687412
10,450.00
Original Amt. 3,000.00 7,450.00
Balance Due 3,000.00 7,450.00
4/19/2011 Discount
Check Amount
Checking, MyTown B
Payment 3,000.00 7,450.00 10,450.00
10,450.00
Presented by: Diane C. O. Gilson President, Info Plus Accounting, Inc. Certified Advanced QuickBooks® Pro Advisor e-mail: [email protected] © Info Plus Accounting, Inc. Ann Arbor, MI 48104 web: www.BuildYourNumbers.com + www.InfoPlusAccounting.com
This session : Getting the Bills into the System
Making the right moves Terminology Entering Bills - The top portion - Discounts & options - Retainage payable -Variance from PO’s Vendor credits and pre-payments After the entry…
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
Pre‐requisite: “You Can Write Your Own Checks Here” workshop
Covered in that workshop (i.e., not to be duplicated here): o Best practices re: when to use Bills and when to use Checks o Entering info into the bottom portion of Bills, Checks and Credit Cards o Detailed info on checking styles, check ordering, check printing, safeguarding of checking account funds, etc. o Check vouchers, check signing and mailing, and filing of support for checks and bills
Terminology
Is it a “Bill” or an “Invoice”? o To your vendor, it’s an Invoice (i.e., a Receivable) o To you, it’s a Bill (i.e., a Payable) or a “Vendor Invoice” o So if you’re “Invoicing”, what are you doing? Bill Credit o Is designed to offset a Bill (paid or unpaid). It’s considered to be a separate transaction entered as of a different date. Item Receipt o You’ve received Inventory or other goods, so you know you owe money, but you haven’t yet received the “real” Bill from the vendor. Retainage payable o Some contracts are designed to withhold a portion of the payment due to a vendor until certain conditions (quality, performance, time, etc.) have been met. (I.e., The expense has been incurred, but funds payable are “retained” by you until a later time. These payables are not normally included on standard A/P Aging reports as they are due at some point in the future). Bill Payment (accomplished via “Pay Bills”) o Although Bill Payments are printed on checks, a Bill Payment in QB is not classified or identified as a “Check”. It’s a separate type of transaction called Bill Payment and the bottom portion of a Bill Payment “check” is significantly different than the bottom portion shown for a regular “Write Check” screen. “Paid” vs. “Unpaid” Bills o A Bill will display and/or show on reports as “Paid” only after: It has been totally paid AND After it has been linked to the payments “assigned” to the Bill.
Accrued Expenses (in‐depth coverage in “Year‐end deep‐dive” workshop) o In spite of the word “Expenses” in the title, “Accrued Expense” accounts are short‐term liabilities. They are used to recognize known or estimated liabilities (and related costs) at the end of an accounting period that are not reflected in Accounts Payable or other liability accounts.
© Info Plus Accounting (may not be used or re-printed without permission)
Page 1
Entering Bills & Vendoor Credits: “Just the bassics, m’aam m.” (And there are quitee a few!)
Entering Bills – the top portio on
1. Billl or Credit se election o Typicallyy a Bill o Bill Credits covered laater in class 2. A//P Account n one Accountts Payable acccount o This choice will appeaar only if you’’ve establisheed more than o Re: 2nd Accounts Payyable accountt: May be creatted if you nee ed to see Balaance Sheet reports that show Accounts Payable segregated to s o: “Related”” companies (i.e., other coompanies owned by the saame owner(s)), The owne er(s) Another “set” of speciific vendors. Although this A s option is avaailable, and c an be helpfull for very specific circumsttances, we urge caut w ion and seldo om recomme nd it becausee: It’s easy tto enter Bills to the wrongg A/P accountt You can’tt split Bills bettween A/P acccounts When you Pay Bills, (o or look at the Pay Bills screeen to see wh hat you owe) you need to select,, and be very alert regardinng: Whicch A/P accoun nt you’re view wing or payingg Bills from Not o overlooking B Bills payable inn an alternatee account Unless yo ou filter to show a specific A/P account, Accounts Paayable Aging Reports comminggle all vendorss into one repport. Retainage payable? We’ve se een some ProA Advisors sugggest using an additional A//P account fo or Retainage e Payable, bu ut we believe we have a beetter, and eassier, solution (discussed later in th his class) oose to establish Suggest N NOT making it a sub‐accou unt (to avoid having If you DO cho your regular A y A/P balance sshowing up a s “Accounts PPayable‐Otheer”)
© Info Plus Accounting (may not be used or re-prin nted without p permission)
Page 2
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
3. “Bill Received” box o When the box at the top of a normal “Enter Bills” screen is not checked, it becomes an Item Receipt (the window transforms into “Create Item Receipts). If you have the Company Preference/Items & Inventory/Inventory and purchase orders active box checked, you can also access this screen from: The Vendor drop down menu or An icon shown on the Home screen When to use an Item Receipt Typically used for inventory received without a final Bill. Ideal for inventory/warehouse situations so that people using, or selling, inventory can tell that an Inventory Item has arrived and is available for use or sale. Could be used for other costs incurred but without Bills in hand BUT Item Receipts can be a bit “tricky” (see scenarios below) so the decision to use them should be thoroughly thought through. If you decide to use them, procedures and control processes should be implemented to avoid negative consequences. Financial impact of an Item Receipt An Item Receipt is often created from an existing Purchase Order so that the agreed‐upon Price is copied into the Item Receipt as the cost (e.g., $1,500.00). The date of the Item Receipt is usually entered as the date that the warehouse or shop actually receives the Item (e.g., Feb 2, 20xx). Accounts Payable and the Aging Summary is increased for the amount shown on the Item Receipt. NOTE: No “Bill” will appear in the Pay Bills window as a “real” Bill has not yet been received. Converting an Item Receipt into a Bill To convert to a Bill, simply click the Bill Received box and the Item Receipt becomes a Bill. But date and amount issues arise can occur when the real Bill arrives. E.g.,: Has the prior month already been finalized? The real date per the vendor Invoice is January 30th. Do we correct the date? The real amount per the vendor Invoice (including shipping and handling, is $1,572.57). Do we correct the amount in the prior month? No final answers here, but you should be aware of the issues…
© Info Plus Accounting (may not be used or re-printed without permission)
Page 3
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!) 4. Vendor Name o Type first few letters, and if no name is available as a match, complete the name as desired, and tab into the Amount field. o You’ll receive the message that this name doesn’t exist. You can then go to Quick Add or Set Up (if you want the address of the vendor to show on the Check, go to Set Up). o After establishing the Payee’s Name, if you get a pop up screen, it could be because: Open Purchase Orders exist. You’ll then choose whether this Bill will be used to receive against one or more of these orders. Pay for Time Worked. Time has been entered for the Vendor and the screen will ask if you want this bill to represent time worked. If you click on Yes, you’ll be asked to enter the start and end dates. When you press OK, it will bring in the detail from the Time Sheet. Auto Recall. Occasionally you will be asked if you want to fill the transaction with the previous transaction for this vendor. 5. Date: o Costs show up on (accrual‐basis) reports as of: The date entered on the Bill NOT as of the Bill Payment date (for cost reporting purposes, the date that you actually pay a Bill has no impact on the cost results). o Using the right date for Bills In nearly all circumstances you should use the date on the vendor Invoice. NOT the date that you entered the Bill Why? The date of the Invoice should indicate the day that you Actually incurred the cost and Assumed responsibility for paying the Bill Reports should reflect both the cost and liability as of the “effective” date. Exceptions: Bills received after month‐end cutoffs that you were not aware of. These should be date as of the first of the following month with a memo noting the actual date of the Bill. Certain inventory situations where inventory received dates must precede the Sale (invoicing) date. (Inventory is the subject of a totally separate workshop.)
6. Ref. No. o Enter numbers EXACTLY as shown on vendor Invoice. Why? For reference (easier to look up or track through) If anyone attempts to enter another Bill to the same vendor you’ll get a warning screen. This will help to avoid any duplication of entries (nice control!) o Non‐numbered vendor Invoices (phone bills, electric bills, etc.) Come up with a standardized way to enter. E.g.: “m/e 12‐15‐14” Note: Ref. No. must be IDENTICAL for the warning screen to work, so the standardized approach must be strictly adhered to for the control to work.
© Info Plus Accounting (may not be used or re-printed without permission)
Page 4
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!) 7. Amount: o If auto‐recall has filled the field, and it’s different for this Bill, you can change it here, OR wait until you’ve completed the bottom portion of the transaction and click the Recalculate button. 8. Bill Due o If you have NOT set terms for this vendor in the vendor record, this date will auto fill based on the default set in your Company File Preferences. o You can manually change the date if you wish. 9. Terms o You can manually select terms from this drop down menu if you wish. If you do this, when you finalize your Bill entry, QB will ask if you want to keep this set of terms for this vendor. If you say Yes, QB will modify the vendor record to retain this set of terms. 10. If you chose Terms that included a discount, this field will show the applicable Discount Date. 11. Memo on “top” portion of Bill + what will print on Bill Payment Check o Memo: will auto‐fill the vendor account number if you entered it into the vendor record and/or you can manually enter info into the Memo line. o You can enter other info in the Memo section if desired. o If you create a Bill Payment based ONLY on this Bill (i.e., if you don’t pay more than one Bill with that Bill Payment) whatever is shown in this Memo will print in the Memo section on the Bill Payment check. o When the check is printed, the top Memo will print on the actual check, and the Accounts Payable info will print on the voucher (bottom) sections of the Check. Info printed includes: Date of Bill, Type, Reference No., Original Amount of Bill, Balance Due, Discount, and Payment amount for that Bill. The Total of payments made (in the event of paying more than one Bill).
Assigning Bills to Accounts, Items, Jobs etc.
See the “You can write your own checks here” workshop for basic info regarding how to fill out the bottom section of Bills, Checks and Credit cards. Additional considerations that may apply to your Bill entries: o Discounts – optional ways to enter QB way: When you use a discount, you can assign it to an account Pros: Background calculation, discount date noted separate from actual due date. Cons: No ability to assign discounts taken to a job or Item, and missed discounts are not reported (usually exceptionally high interest rates for missed discounts). Enter discount as a separate “offset” split in bottom portion of Bill and use the discount date as the due date (+ modify vendor name to indicate that they are a “discount vendor”). If discount is missed simply delete it from the split. Pros: Can assign discount offset(s) to desired account, job, or Item if desired. Cons: Missed discounts are not reported (usually exceptionally high interest rates for missed discounts).
© Info Plus Accounting (may not be used or re-printed without permission)
Page 5
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
o
o
Enter the Bill net of discount and use the discount date as the due date (+ modify vendor name to indicate that they are a “discount vendor”). If discount is missed, add it back in and assign it to a discounts lost account. Pros: Net cost is assigned to a job, and missed discounts are highlighted in management reports. Cons: Requires some calculations and closer monitoring in order to not miss discounts.
Retainage payable – the easy way Create a Retainage Payable account (Other Current Asset type). Create a one‐sided Item (Service or Other Charge) that links to the Retainage Payable account. To record Bills for which Retainage Payable is being withheld: Enter the full amount of the Bill and job cost appropriately. Use the Retainage payable Item and offset the amount shown as cost on the bottom of the Bill – include the job name. Result: Current Bill to vendor is netted down to proper amount Retainage Payable (non‐Aging Account) shows correct amount payable at a pre‐determined time in the future. When the conditions regarding Retainage payable have been met: Enter a Bill to the vendor using the Retainage Payable Item and the correct due date. Result: The Retainage Payable account is decreased. Accounts Payable are increased and age properly. Note: The Retainage Payable account should be regularly monitored and reconciled. When a Bill is higher than the imported Purchase Order,... The person entering Bills should follow up with the owner or job supervisors – and make the entries as directed (i.e., probably hold off on entry until the overage is understood, discussed, and approved). Additional entries (e.g., entering Change Orders to Estimates, or modifying P.O.s may also be required)
Vendor credits
A Bill credit should be a mirror image of the original Bill to which it relates (i.e., the cost should be netted back against the same Account or Item and job). o You’ll need to research the reason for the credit. E.g.,: Was it a return of materials? An adjustment? A discount? Etc. What Bill does it relate to? What was the original entry? o From the Enter Bills window, click on the “Credit” button at the top of the Bill. The screen will change slightly Enter info just as if the credit was a Bill. Use the Reference Number created by the vendor (if none, enter the original Bill Ref. No. with CR added to the end – or use other descriptive info).
© Info Plus Accounting (may not be used or re-printed without permission)
Page 6
Entering Bills & Vendor Credits: “Just the basics, m’aam.” (And there are quite a few!)
Prepayments to vendors
Write a check to the vendor o In the Expenses (Account) tab, choose the Accounts Payable Account. o In the Customer:Job column indicate the Vendor name again (QB will require it) o Results: This creates a vendor credit that can be applied against future Bills from them. Costs are entered into the period incurred based on Invoices and the prepayments can be tracked and “drawn down” as used. As long as a credit exists, it will continue to be visible in your Accounts Payable report (good tracking so that unused payments don’t get lost).
After Bills and credits have been entered into QuickBooks
Physically Stamp vendor Invoices (Bills) and Credits as “Entered”. o Indicate date actually entered. Use an Alpha “Expando” file to hold unpaid Bills for payment o You’ll track what needs to be paid using other QB reports. o Note: After payment, Bills, vouchers and support will be filed in a different place. Cost info entered via Bills is now accessible for Invoicing customers Reports that are dependent on Bills being entered should be up‐to‐snuff.
Next Stage: Processing Bill Payments and Credits …
© Info Plus Accounting (may not be used or re-printed without permission)
Page 7
4/19/2011
**10,450.00
Layers of Stone
Ten Thousand Four Hundred Fifty and 00/100*************************************************************************** Layers of Stone
Layers of Stone Date Type Reference 2345 5/24/2013 Bill 4/19/2014 Bill 5687412
Original Amt. 3,000.00 7,450.00
Balance Due 3,000.00 7,450.00
4/19/2011 Discount
Check Amount
Payment 3,000.00 7,450.00 10,450.00
Voucher Check printed on plain paper: 1. Note that the check number and other printed check info doesn't show on a "plain paper" print. 2. The detail on the vouchers indicates the specifics on Bills being paid so the vendor should apply your payment in the same way that you are paying the Bills. 3. Note that Bill Payment stubs do NOT indicate the accounts or Items that the original Bill was assigned to. 4. The total being paid to the vendor is indicated as the Check Amount on the voucher copy as well as on the Bill Payment check. Checking, MyTown B
Layers of Stone Date Type Reference 5/24/2013 Bill 2345 4/19/2014 Bill 5687412
10,450.00
Original Amt. 3,000.00 7,450.00
Balance Due 3,000.00 7,450.00
4/19/2011 Discount
Check Amount
Checking, MyTown B
Payment 3,000.00 7,450.00 10,450.00
10,450.00
