Solved! Go to Solution.
"Bill" type transaction increases expenses and increases Accounts Payable
"Expense" or "Check" type transaction increases expenses and decreases Bank balance (or increases Credit Card Liability)
"So if I pay for something (ie: a recurring monthly charge) with my credit card,"
That means you Already Paid that provider. Go directly to Expense as From My Credit Card Account. This is a running Debt balance, and this is your liability = you need to pay the Card Provider later; they acted as your lender and gave you a Micro-loan = let you Charge something.
"that recurring monthly charge is recorded as a bill?"
There is no Bill. Bill = something that is Unpaid; you Paid them by Plastic instead of Cash or debit card.
Bill = I am entering something I have not yet paid for and won't pay until later. The date on the bill is supposed to be Different than the date you paid it, because this is Accounts Payable = I am accruing something I need to pay. This is a Type of Liability. Loans, mortgages, credit card account debt, lines of credit are all Different types of liabilities. You don't mix Credit Card with Bill (AP) because that is running Liability through another Liability.
"Then, when I make a payment to my credit card (that already paid for the recurring monthly charge), that payment to the credit card is recorded as an expense?"
That is Debt payment, and Intuit uses the word "Expense" to = Check or Paperless check. But it won't post as an Expense account activity. It is a Transfer: Checking against Credit Card Debt account.
And you don't nee Bills to make things track and report. All you need is the Payee Name on Checks (expense transaction) and Credit Card Charge entries, as well as bill (to show something is Not Paid Yet). As long as you use Names, you have the reporting.
So, if someone gives you your copy of the paid Bill, there is no reason to use Enter Bill. You already paid for it on this same date.
Do you have to create an expense? Because when the check is cashed or when the credit card is used to pay the bank automatically downloads that and doesn't that create an expense?
Thanks for following this thread, Daffodilmom.
Yes! If your phone payment is a transaction you pay on the spot, then you can use the Expense feature in QuickBooks Online to record it. You can also opt to write a check since they work similarly with creating expenses.
In case you need the steps in doing so, here’s how to create expenses:
Check out this article for the detailed steps:
To write checks, go to the Plus icon, select Checks, then enter necessary details.
For additional reference, visit this article:
If you have other questions in mind about recording expenses or checks, feel free to let me know. I’m only a comment away.
QuickBooks Online has different ways in managing your business transactions. Let me help you record your transactions in the program.
The manner of entering your expenses depends on the method used when processing the payments. If this is an on-the-spot payment and you release a check to pay it, then you can enter it in the program by using either the Check or Expense feature.
Meanwhile, if you used a credit card which is connected in your QBO account, there isn’t a need for you to create expenses manually. You’ll just need to categorize the downloaded transaction and add it to the affected account.
To do so:
In case you need to write a Check:
For more insights, check out these articles for your reference:
That’s it! You’re now set to record your transaction in the program.
Drop me a response below if there are other things you need help with. I’m here anytime!