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      How do Bills work?

      Whenever your business purchases goods and services from a vendor that needs to be paid back in short time, this is also known as Accounts Payable. 

      A Bill is used to record a business transaction where the items and services from a Vendor have been provided to the business owner, but payment isn’t due until a later date. If you’ve already paid for an item or service in full upfront, this would be an Expense instead. These Bills can be anything from raw materials, utility and internet, or paying for contractors and professional services for example.

       

      Bills & Vendors are part of Accounts Payable which is available on trials, Premium and Select plans only.

       

       

      Create a Bill

      To create a Bill, either:

      1. On the Dashboard, click on the Create New... button, then select Bill
      2. Or go to the Expenses section
        1. Then click on the Bills sub-section underneath
        2. Click on the New Bill button or the + button at the top of the list of Bills.


      Alternatively, if you already have a Vendor set up, you can quickly create Bills from this Vendor using these steps:

      1. Go to the Expenses section
      2. Then click on the Vendor sub-section underneath
      3. Click on the Vendor you want to create a Bill for
      4. In the Vendor profile, click on either the New Bill button or the + button at the top of the list of Bills.


      You’ll be taken to the new Bill screen:

      New bill screen with fields to fill out.

      1. Click on the Add Vendor text and type in a new Vendor or choose from a pre-existing list of Vendor you've used before
      2. The Issue Date is automatically set to present day, click to change it to a different date instead
      3. Next, change the Due Date to when the Bill is due for payment (the default is one month from the Issue Date)
      4. If needed, add a number in the Bill Number field
      5. To attach an image or PDF document image to the Bill, follow the steps here
      6. Click on the Add a Line button
        1. If needed, click on the Description field and add details about the Bill
        2. Next, click on Add Category and choose a Category or Subcategory (or create your own Custom Subcategory instead)
        3. Specify the Rate
        4. To add taxes, click on the Add Taxes link and follow the steps here
        5. The Qty will default to 1, click and type to change the quantity if needed
      7. Repeat step 6 as needed to add more items or services to your Bill
      8. Under Bill Settings are a few more options:
        1. Click on Currency & Language to change to a different currency and/or language, and click Done to save
      9. When you're done, click on the Save button to finish.

       

      Pay a Bill

      Mark an individual Bill as paid or several Bills in bulk using the below steps:

       

      Pay an Individual Bill

      1. Go to the Expenses section
      2. Then click on the Bills sub-section underneath
      3. Click on the Bill you want to mark as paid
      4. Next, click on More Actions then select Add a Payment
      5. In the Add a Payment pop-up, the Amount will be populated with the full total of the Bill - this can be overwritten if the Amount paid is different
      6. Next, choose the Payment Method in the dropdown
      7. The Date of the payment will default to today, click on it to change it to a different date if needed
      8. If needed, in the Payment Notes field, add details about the payment
      9. Click Add Payment to finish and the Bill will now be marked as Paid.

       

      Bulk Pay Bills

      1. Go to the Expenses section
      2. Then click on the Bills sub-section underneath
      3. Check the box(es) next to the Bill you want to mark as paid
      4. Click on the Bulk Actions button
      5. Then select Add a Payment
      6. Choose a Payment Method
      7. The Date of payment will automatically default to present day, click to change it to a different date instead
      8. Then click on Payment Notes and add details if needed
      9. Click Save to finish and the Bill will now be marked as paid.

       

      Bill Payment Reconciliation

      Bill Payment Reconciliation allows you to match a Bill Payment with an Expense to avoid over-reporting your Expenses, especially with Bank Connections automatically importing Expenses for you. The Bill Payment Reconciliation can be accessed in two ways: 

       

      Potential Bill Payments

      Through the Review Potential Bill Payments banner, which is created if a Bill exists before the Expense is imported in by your Bank Connection, by clicking on the banner in any of these locations:

      Banner indicating two potential expenses that could be bill payments with a link to manage them.

      • In your Bank Connections
      • In your Expenses, above the list of Expenses
      • In your Bills section, above the list of Bills

       

      In the Review Potential Bill Payments screen, use these steps to match your Bills and Expenses together:

      1. Click on the Review all link next to the banner indicating potential Bill Payments
      2. If you have Duplicate Expenses, you will be asked to resolve those first before proceeding with Bill Payments
      3. FreshBooks will automatically match Bills to Expenses for you
        1. If you see matches that are incorrectly matched, click on the checkmark to deselect it
        2. If you see matches that are correctly matched and there is nothing to change, keep it checked off
      4. Click Match and Continue or Match to proceed to the rest of your manual matches
      5. The Expense will be shown on the left, either: Review bill payments screen with options to match or keep as expense.
        1. Select the Bill to match it to on the right under the Potential Matches tab
        2. Click on the Bills tab and select from the list of Bills to match it to
        3. Or click on the Keep as Expense button if it’s an Expense and not a Bill Payment to skip it
      6. Click on the Match and Continue button until all Expenses have been matched to Bills or marked as Expenses.

       

      Mark as Bill Payment

      Through the Expenses section and using the Bulk Actions button to select Mark as Bill Payment: 

      1. In the Expenses section, check off any box(es) next to any Expense(s)
      2. Click on the Bulk Actions button
      3. Select Mark as Bill Payment
      4. The Expense will be shown on the left, either: Mark as bill payment screen with options to match or keep as expense.
        1. Select the Bill to match it to on the right under the Potential Matches tab
        2. Click on the Bills tab and select from the list of Bills to match it to
        3. Or click on the Keep as Expense button if it’s an Expense and not a Bill Payment to skip it
      5. Click on the Match and Continue or Match button until all Expenses have been matched to Bills or marked as Expenses.

       

      FAQs

      How do I match a paid Bill to an Expense if the Bill was created after the Expense?

      When paid Bills are created after the Expenses have been imported in by your Bank Connection, the Bill Payment Reconciliation banner is not triggered. It is recommended to delete the Expense after the Bill is created so Expense amounts are not duplicated on the Profit & Loss Report and remains accurate.


      What’s the difference between a Bill and an Expense?

      • Bills - Purchase made from a Vendor that will be paid in the future. Bills can use multiple Expense Categories and can be paid later and also creates liabilities in your books

      • Expenses - An immediate purchase made from a Merchant. Expenses can only be assigned one Expense Category, and no liability is recorded since it is paid upfront

       

      How do I manage my Bills?

      From the Bills section, hover over any Bill to quickly perform any of these actions: 

      Quick actions bar with four buttons over a Bill row.

      • Edit - Click on the pencil icon and you’ll be taken to the edit screen of the Bill where you can adjust and save afterwards
      • Delete - Click on the trash can icon to delete the Bill. You can view all deleted Clients by clicking on the deleted link at the bottom of the list
      • Add a Payment - Click on the coin icon to add a payment to the Bill
      • More Actions - Click on the ellipsis icon for additional actions including:
        • Duplicate - Click on the two papers icon to create a copy of your Bill
        • Change Category - Click on the pizza icon to update the Category of the Bill
        • Change Vendor - Click on the person icon to update the Vendor on the Bill
        • Archive - Click on the box icon to move the Bill to your Archived Bills list

       

      What happens to my Bills that I created during my trial or before I downgraded?

      If you've created Bills while on trial or downgraded to a plan that doesn't have Accounts Payable (Bills & Vendors), you'll still be able to view and edit only your existing Bills. 

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