QuickBooks 2020 – Section 5 Transcript
The transcripts below come from the QuickBooks 2020 course on Simon Sez IT. You can follow along for free by watching the free QuickBooks 2020 course.
Working with Vendors
Cindy: We are now going to start talking a little bit about working with vendors, which is the accounts payable side of QuickBooks. This is module five, Working with Vendors, and we’re on section one where I want to start off just talking to you a little bit about how to set up your vendors and how to actually see what’s going on with your Vendor Center. Let’s go ahead and flip over to QuickBooks and we’ll start talking about vendors.
We’re going to be talking in this module about working with this section right here of QuickBooks which is your accounts payable. Remember this section has to do with bills that come in the mail that you have to pay.
The first thing you’ll want to do is set up your vendors and vendors are people or businesses that buy from you. You have a Vendor Center which you can access right here and it’s going to look just like the Customer Center except it holds vendor information.
Looking down the list here on the left you’ll see all of your vendors in alphabetical order and you’ll notice with vendors you don’t have any items that are indented under any of these. They’re all just going to be on one straight line like you see here. You can see the balance that you owe the vendor and also you can attach a file that might have something to do with the vendor over here.
I’m currently looking at all of the active vendors. I can see this right here. I could click this down arrow and look at all of the vendors, maybe just ones with an open balance or go in and do some custom filtering if I want to see certain items from the list.
One of the things that happens often is that people do not put all of their bills in QuickBooks and therefore all of their vendors are not in here. And what happens is when you go to do some different things like a budget in QuickBooks or you want to run reports and see who you owe it’s not really going to be accurate if you haven’t put all the bills in here. So make sure you do that and then that will prepopulate all of your vendors as well.
When you’re clicked on a particular vendor you will see the information about the vendor, like their address, their phone number, things like that. You also have a couple of quick reports for vendors. You can see those right over here. There’s also one for an open balance.
Let’s look at your tabs down at the bottom. These are just like the tabs that we saw when we were looking at customers. The first thing you’ll notice is you have a tab that shows you all the transactions for that vendor. In this case for Bayshore Water we can see there are several different checks we’ve written. And if we want to go to one we just double click on that check and then we can either just look at this and close it or we can make a change to it and then save it. Let me go ahead and close that.
You’ve also got a tab that says Contacts. If there’s a particular contact at your vendor’s company that you would like to keep track of you can track this here. Remember to enter a contact you go down here where it says Manage Contacts and you’ll choose Add New.
You also have To Do’s. And we had talked about these when we talked about customers. And we had talked about these previously. Remember that To Do’s are things you have to take care of related to this vendor. It could be that you have to make a phone call, set up a meeting, those types of things.
You’ve also got a place to track all your notes whenever you have a conversation with your vendor. You can keep track of all that here. And also if you send your vendor any emails through QuickBooks you will see those listed here as well.
Let’s talk now about setting up a new vendor. All you have to do is come right up here where it says New Vendor and choose the New Vendor option.
The first thing you’ll want to do is give your vendor a name and let’s just go ahead and call this one Tim’s Specialties. There is a place for the opening balance. This would be if you owed your vendor any money as of the start date of your company file. You could plug in that balance. What I like to do is leave this blank and not put anything here and go back and actually in all of the bills that I owed my vendor as of the start date of my company file.
The first tab that you’ll see here is the address info. This is where you can plug in information like the name of the company. You can put in the full name of the vendor. Let’s say that the company name is Tim’s Specialties. We’ll just plug that in here. And we’ll say that it is Tim Smith. You can go down and put in Tim’s job title. Maybe he’s the owner of the company. You can put in the phone number, the fax, the email. And if you want any of these fields to represent something different go ahead and choose it from the dropdown list like you see here.
You’re going to end up with Tim’s Specialties address info right here. So that way if you’re sending correspondence out then you’ll be able to pull in that address. And let’s go ahead and populate this. We’ll just say it’s 124 River Street Savannah, Georgia and we’ll just leave the zip.
The next thing is the Payment Settings over on the left. Now if you notice I didn’t put in the zip code and it recognized that and so it pops up the Edit Address Information and gives me a chance to put the zip in. If I don’t know it or I don’t want to put it in right now I can just click OK and get past that.
I’m on the Payment Settings tab and here I can put in my account number with the vendor if I happen to have one. I can put in any terms I have with that vendor. When I print a check for that vendor what name would Tim like to appear on his checks. I can set a credit limit for that vendor. What that would do is if I put in a bill and I exceed my credit limit it will pop up and say “Would you still like to buy something?” And also there can be different billing rates that possibly the vendor set up. If I do certain work with this vendor they might charge me one fee and if I do something else they might charge me a different fee.
The next thing on the left is your Tax Settings. One of the things I mentioned to you way back in the beginning when we went through the Easy Step Interview was the fact that there was a question that said, “Do you do payroll?” and in there one of the checkboxes was that you have 1099 contractors. I had said to you at that time that 1099 contractors have absolutely nothing to do with payroll. They are actually set up as vendors and here’s where you would set that up. You would put in your vendor’s tax ID number and then if they’re eligible for 1099 you would just check the box. This is how QuickBooks knows when it needs to print 1099s at the end of the year who gets a 1099.
The next tab over are your account settings. If you wanted whenever you put in a check as an example or a bill for it to prepopulate three accounts from your Chart of Accounts you could do that. Other than that it’s just going to pull the previous one.
And the last thing is the Additional Info tab. You might have different vendor types that you want to track and we also talked when we were setting up customers about the fact that you can come over to this section and choose your Define Fields and set up any fields you would want to appear for customers, vendors and/or employees.
I’m going to go ahead and click OK here and let’s see if our new vendor is in the list. If you remember with customers that it put the new one at the top of the list. Here it’s going to go ahead and put them in alphabetical order. I just kind of clicked on the word Name there to sort it and you’ll see there’s Tim’s Specialties right here and now I can go ahead and add another one if I needed to do that.
Now one other quick thing you can do. When I go back to the New Vendor option if I have several vendors to add I can just add multiple vendors all on one screen. I don’t have to add them one at a time.
All you have to do is go to the bottom of this list here and there is a blank one where you can start typing in the new vendor. You could also if you have Excel spreadsheet with your vendors already set up and you have the columns set up the way you see here you can just copy and paste them all and it’s done. When you’re finished you just hit Save Changes at the bottom and then all of those new vendors will be in the vendor list.
And that’s really all there is to working with your vendors.
Let’s go ahead now and go over to section two and talk a little bit about entering bills.
Entering Bills
Cindy: We are working in module five and we’re talking in this module about working with vendors. We’re all the way on section two now. We’ve already talked about how to set up the vendors. Now that you have a vendor set up you can go ahead and start entering some bills. Remember that bills come in the mail that you have to pay. You can run reports on bills to see who you owe, if it’s over 30 days, that sort of thing. Let’s go ahead and flip over to QuickBooks and talk a little bit about how to enter those bills.
There are a couple of things I wanted to tell you about bills. If you actually work with the purchase order system and you actually receive items into your inventory then you would actually use the flowchart going in this direction and it would eventually take you to this Enter Bills right here. This is the same screen. It’s just if you use this one it’s like entering an electric bill or something like that where you didn’t use the purchase order system. I’m going to go ahead and click on Enter Bills.
The first thing you’ll want to know about the bill screen is just like with your invoicing and your estimates you can come over here and hide the history if you want and that way you have more room on your screen to work.
The first thing you’ll want to notice up here is the fact that it defaults to the fact that this is a bill but it could be a credit. Sometimes your vendor may send you a credit for something and you’ll see it says Credit when you choose that option. I’ll go back and choose Bill and then it asks you who is your vendor. When we look down this list we’re going to go ahead and say that it’s Cal Gas & Electric and they’ve sent us the electric bill. You’ll notice it prepopulates the address for us and if we had the terms already set up then it would populate that for us as well. If you get in here and you decide the terms are different just go ahead and change them to what they should be.
You do have a place for the discount date as well. Sometimes a vendor will give you terms of for example 2% ten net 30. And that means that the bill is due in 30 days but if you pay it in 10 days you can take 2% off. And this is where that 10 day date would appear.
This is the date right here that’s actually printed on the bill. You want to actually use that date, not the date that you decided to open the mail or decided to sit down and put it in QuickBooks. It needs to be the date that’s actually on the bill. And the reason for that is because the due date down here is the really important date for pulling reports and things like that. You want to make sure that date is correct. In this case it should be 30 days from this date to this date. Now if you happen to be looking at the bill and it just says it’s due on the 15th of January, for example, just change that. Remember this is the important date right here.
Back up to the reference number, if you think about it this is an invoice on the vendor’s end and it’s a bill on your end. Their bill number is what you would plug in here. That way when you mail them a check or you have a payment it knows which bill to associate it with.
And then you’re going to put in the amount, $252.79. Now if you’ve changed the terms for Cal Gas & Electric then when you go to save it it’s going to ask you would you like to save these. I’m going to go ahead and hit Cancel for a moment and finish filling out the rest of this.
You’ll notice down at the bottom you have an Expenses tab and an Items tab. The Expenses tab will list your Chart of Accounts. And in this case it happens to be utilities, gas and electric. And it pulled this because they’ve entered Cal Gas & Electric before and so it’s just pulling the information from the previous one.
You can actually break this down into multiple line items if you need to do that for some reason. You can also break this down between expenses and items if you need to do that. Both tabs have to total this to the penny or it will not let you save it.
If you’re using the Job feature you will want to come over and choose the customer and the job that this might relate to. Now if this is just for the office you really don’t have to pick a customer and a job but if you want to keep your job costing consistent and this does pertain to a customer and job make sure you fill it in right here. And also if you’re using the class feature you’ll want to use that right there.
Let’s head up to the top of our screen and see what we’ve got.
First of all here’s the Find feature. Remember that if you use the arrows it will take you to the previous or the next bill. And remember in QuickBooks everything is in date order. And if you can’t find it using those arrows just click your Find option here and you’ll be able to search by vendor or by amount or any of the criteria that you might already know.
Here’s where you’re going to create a new bill. Remember that’s going to save this one and it’s going to put you on a new blank bill so that you can fill out another one. That’s the same thing as Save & New down at the bottom.
Here’s where you’re going to be able to delete this bill. You can also create a copy. If this is something that happens every single month and maybe it happens at pretty much the same time and just the amount changes, just like it would be for an electric bill, you could go ahead and create a copy of this and then change the amount you need to for the next one and that’s all you’d have to do.
You could also memorize this. And memorize basically means that if I don’t want to have to remember to put this bill in QuickBooks every month QuickBooks can do it for me automatically and then I’ll just change the amount as I need to.
You can also come in and print this. And just to show you what this would look like, and yes I’m going to say I’ve changed my terms over here but if I print this basically it looks just like this where it says Bill at the top and it says Expenses right here and you can see that the total of the bill is $252.79. I’m going to close that.
You can attach a file. If you happen to have maybe a purchase order or some file that you’d like to attach to this for easy access you can certainly do that here. If you were using the Purchase Order system it could be that you want to go in and select the particular purchase order that this bill applies to. You could also enter some time here that might be related to this bill in some way. You could clear the split. What that basically means is if you have more than one line item down here, for example, that’s called a split or if you had some of this under the Expenses and some of it under the Items that would be a split as well and you could clear those.
You could also have QuickBooks recalculate. If the numbers aren’t matching up you can have it recalculate for you. And you can choose to pay the bill. Now chances are you’re not going to be on this screen when you want to pay this bill but you could if you were already here.
The next tab over are the Reports that have to do with your bills. You can see that you can run a quick report or transaction history on this particular bill. You could also run a transaction journal which would just show you a timeline of basically where the bill was put in, maybe if you’d paid the bill already you could see those things. You can look at an item listing, open purchase orders, a vendor balance detail, unpaid bills detail, and purchase orders by vendor detail.
And that’s really all you have to do when you’re entering a bill. You just fill this out and hit Save & Close at the bottom and now that bill is in here.
If I go back to the Vendor Center on the left and I find Cal Gas & Electric and click on it you will see that the bill that we entered is now in here and the next thing we need to do is go ahead and pay that bill.
So let’s go ahead and head over to section three and we’ll talk a little bit about paying your bills.
Paying Bills
Cindy: Okay we’ve been talking about working with vendors here in module five. We’re all the way down to section three now and I want to talk to you about paying your bills. We’ve already gone through and entered the bills. Now all we have to do is check off the ones that we want to pay. It’s a pretty simple process so I’m going to flip over to QuickBooks and I will show you where you go to pay your bills.
Once you’ve entered the bill over here you want to go straight across and follow the flowchart to the Pay Bills option here.
Before I click on that I just want to mention something. What you don’t want to do is enter a bill here and then come down and either write a check or put it in the check register. And the reason for that is because it doesn’t know there’s any association between this check you’re writing and this Enter Bills feature here. If you follow the flowchart and go over to the Pay Bills here then it will actually put that check in the register for you once you’ve completed this step. I’m going to click on Pay Bills.
You’re looking at a list of all of the bills that you owe money on, even if you owe a penny. And currently you can see that they’re sorted by vendor and that’s probably the best way to do this because then all of CU Electric is together, Cal Gas & Electric is together and so forth. But notice you could sort these by the due date, if you want to look at them by the amount due, things like that you can sort that way. You can also filter this list. If you just wanted to see all of the bills for Cal Gas & Electric you can choose it and notice how it hides everything else on the list. If you’re wanting to see all of these make sure you go and choose All Vendors from the top of the list and then you’ll see they come back.
Also notice that I’m showing all of the bills like I mentioned but I might only want to look at ones due before a certain date and I can choose that date right here.
I’m going to go ahead and pay Cal Gas & Electric and there’s actually two. There’s the one that we did and let’s say we had another one in here already that we wanted to pay as well. All you do is you check off the bills that you want to pay and it will assume you’re paying all of that bill. Now if you’re just paying a portion just come over here and type in whatever you are paying. It will remember the balance and then you’ll see it for the next time.
Down at the bottom here, the first thing you’ll see is there’s an option that says Go to Bill. One of the few places in QuickBooks that you can’t double click on a transaction to go to it is right here in this Bills window so you’ll need to make sure the one you’re actually clicked on is the one you want to go to.
The next thing you can do is you can set your discount. If you had terms of 2% ten net 30, for example, then you can go ahead and pull this up and type in the amount of the discount you’re going to take. And also the account that would be associated with that. You might need to set one up. You would call it Discounts Taken. All right I’m going to cancel that.
Also if you had a credit memo that you hadn’t applied yet to an invoice you would just select the invoice you wanted to apply it to, choose Set Credits, and it would list any credits available in the list here and you would check off the one you want and you would just say Done.
The next thing you have is the Payment Date. I’ll just say it’s December 31st. The method, are you going to pay for this with a check or a credit card or are you hooked up for online banking? And the next thing is do you want the check number field to say To be Printed and that way you can print a batch of these if you need to or would you like to go ahead and assign a check number yourself? I’m going to show you what happens if you choose that one. And then make sure you have the correct account chosen here that you’d like to go ahead and write that check from and say Pay selected bills. Notice that it brought up my check. It’s one check for both of the bills. I’ll be able to type anything I want in that check number field. You just want to be consistent with whatever it is that you’re typing here and that way you could find things when you’re looking for them in a list. I’m going to click OK and that bill is now paid. This is actually asking me if I want to pay more bills or am I done? I’m just going to say Done.
I mentioned to you that once you go through the Pay Bills window it would be in the register. Let’s go ahead and head over to the Check Register and check it out. And there’s Cal Gas & Electric right there at the bottom.
Now something else I want to mention to you. Often what happens is people will say to me “I know that I paid a specific bill but it still shows up as being unpaid when I run a report.” And here’s how you can tell what happened. If you notice some of these just say Check and then some of these say Bill Payment. If I did this the correct way, meaning if I entered the bill and went through the flowchart to pay bills then what it would look like in the register is right here where it says Bill Payment. That’s the correct way to do it. If I just saw somewhere it said Check that tells me that there was no association between that bill and this check that someone wrote. And so what they would have to do is delete this check and go put it in the correct way and then that bill would not appear on their unpaid bills report anymore.
And that’s really all there is to paying your bills. Just make sure you enter bills and pay bills and then you are done.
We’ve got one more thing in this particular module we need to cover and that is working with credit memos. Let’s head on over to section four.
Credit Memos
Cindy: We’re on the last section in module five. We’ve been talking about working with vendors. I want to go ahead and talk to you in this section about how to enter the credit memos that your vendors may send you to apply towards a bill or upcoming bills. This is section four, Credit Memos.
To enter a credit memo that a vendor has sent you use the Enter Bills window and all you’re going to do is you’re going to check the option that says Credit and then put in the vendor name. Let’s say this is Cal Telephone and we’re going to put in the date of the credit memo. I’ll go ahead and change this to the 24th. You would fill in the reference number if there was one. And then put in the amount of the credit memo. We’re going to say it’s $25. I’m going to actually choose the expense account this would go to as well. In this case it’s going to be utilities and then we’ll choose telephone underneath. And remember if this does apply to a customer or a job you’ll want to choose that here and also choose the class if you’re using the class list.
Now I’m going to go ahead and Save & Close and I’ll show you how to apply that credit memo.
I’m going to follow my flowchart over to the Pay Bills window and when I get in here I’m going to check off Cal Telephone. Now if there were multiple ones for call telephone you would check the one that you want to apply the credit memo to.
Down at the bottom of my screen I have the ability to set credits and you’ll see that it tells me I have a $25 credit available. I’m going to click on that Set Credits button and notice here is the credit memo for $25 and it’s already checked. If I wanted to use a different one on the list I would uncheck this one and check the correct one. And I’m just going to click Done. And you’ll notice now that it’s $66.94 and that $25 has already been applied. And that’s all you have to do to actually set up the credit memos and apply them to your bills.
I’m going to go ahead and Pay Selected Bills at the bottom just to get out of that window and if I wanted to pay it I would go ahead and put in the check number or the word Debit. If not I can cancel that and then just cancel this window down at the bottom. That does not cancel the credit memo where it was applied. And that’s all you have to do to work with credit memos.
That’s going to wrap up module five where we’ve been talking about working with vendors. Let’s go ahead now and move over to module six where we’re going to talk about working with items and inventory.
Cindy McGuckin
Cindy McGuckin is an IT trainer with over 20 years of experience. Cindy currently manages the IT Training Department at Trident Technical College, she's a Member of the Association of IT Professionals, Charleston, SC chapter and the Treasurer of the South Carolina Association of Continuing Higher Education.Cindy is a Microsoft Office and QuickBooks expert and her online courses have received hundreds of 5-star reviews. Her no-nonsense approach to teaching complicated topics makes her classes engaging and interesting.
