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If you’ve paid with a credit card or electronic funds transfer (EFT), then use an expense to record the payment. If you don’t use checks, then you can likely use a vendor expense for all of your expenses instead of having to worry about which document to use. Because you paid for the items on the spot, you wouldn’t need to use a bill and payment. You might use an expense for office supplies at a Staples or Office Depot. You’d use a vendor expense for the same reasons you’d use a check: to record expenses and payments immediately. Many businesses today have moved away from checks, but if you still use checks and need to print them, then use this document to pay your bills. Use a check when you need to print the check or when you want to print it later with other checks. Both a check and an expense will record the expense and payment immediately.

There isn’t much of a difference between a check and an expense in QuickBooks Online. Or if you sell online, you may use bills when you pay half up front for inventory and the other half upon receipt. You might use a bill when you have a utility bill that is due at later in the month. When running reports in QuickBooks Online, you can switch between cash and accrual accounting. Various reports will also be affected if you’re on accrual accounting since accrual accounting counts money when it’s earned and billed, whereas cash accounting recognizes money when it is received and paid. These transactions are also tracked in your Accounts Payable account. With bills, you can track open balances and amounts owed to vendors. When you do pay the bill, you’d use Make payment button on the bill or Pay Bills feature in QuickBooks Online. The biggest difference between a bill and an expense or check is that a bill is generally used when you have an expense that you’ll pay later. Generally speaking, bills should be used to record expenses that you’ll pay later, while expenses and checks should be used to record expenses and payments made right away. We’ll go over how these transactions affect the various accounts in your books. Learn about the differences between vendor bills, expenses, and checks in QuickBooks Online in this article.