working · Lesson 2 · 10 min
Bills, expenses, and accounts payable
Enter the bill when it arrives. Pay it later by matching the bank line. That is how AP stays honest.
Bill first, pay second
A supplier bill is the purchase-side twin of an invoice. On the bill date: debit expense or asset, credit AP (and tax if recoverable — US sales tax on purchases is usually not a recoverable VAT; it sits in the cost). On the payment date: debit AP, credit bank.
| Account | Debit | Credit |
|---|---|---|
| 6200 Fuel & vehicle | $340.00 | |
| 2000 Accounts payable | $340.00 | |
| Totals | $340.00 | $340.00 |
When there is no bill
A card swipe at the hardware store with a receipt and no terms is a spend-money (Xero) or Expense/Check (QBO). Debit expense, credit bank or credit card. Do not also enter a bill — that would double the cost and create a phantom payable.
Xero Purchases
Purchases → Bills. New Bill: contact, date, due date, line account and tax, Approve. Awaiting Payment is your AP. Purchase orders do not post until billed. Hubdoc (included on Xero business plans) can extract a photographed bill into a draft for you to code and approve.
QuickBooks equivalent
Expenses → Bills, then Pay bills (or match the withdrawal). Vendor credits are Xero’s payable credit notes. QBO Essentials and above are the tiers that actually have bills; Simple Start expects you to expense as you pay. That is a cash habit, not accrual books.
Check
Choices shuffle each visit. Misses send you back to the section — Look back clears the quiz so you can try again.
Choose an answer, then check.
You entered a $200 bill and also coded the $200 bank payment to the same expense. The damage is:
Practice: Enter the bill