How To Enter, Track, and Pay Bills in FreshBooks
This article is part of a larger series onAccounting Software.
We’re pleased to present this tutorial for FreshBooks, our pick for one of thebest QuickBooks alternatives. In this third tutorial, we’re going to cover how to add vendors and enter, track, and pay bills in FreshBooks. We’ll also look at how to manage and view unpaid bills.
You’ll receive the most benefit from this tutorial by following along in your own FreshBooks account. You can tryFreshBooksfor free, or receive 60% off for six months.
Do you want to learn more about other options? Read our picks for thebest small business accounting software.
To add a vendor in FreshBooks, first click onExpenseson the left menu bar, and then theVendorssubsection. This will take you to the Vendors screen, where you’ll click on the greenNew Vendorbutton. Alternatively, if you’re on the Dashboard, you can click on theCreate New…button, and then selectVendor.
This will take you to theNew Vendorscreen. From here, you can fill out your vendor’s profile by following these steps:
- Enter aCompany Name.
- If no Company Name is entered, enter aFirst NameandLast Name.
- Fill out these optional fields:
- In theAccount Numberfield, enter your account details with the vendor.
- Add an email in theEmail Addressfield.
- Enter a URL in theWebsitefield.
- Enter a number in thePhone Numberfield.
- Specify the vendor’s address by filling in theStreet,City,State/Province, andZip.
- Code, andCountryfields.
In theVendor Settings, you can specify:
- Currency & Language: Change the default currency and language for this vendor
- Tax Type:Indicate whether this vendor is a1099 contractorin this field, which will makeprocessing 1099sa lot easier at tax time
- Sales Tax Type:Specify if you pay sales tax to this vendor, and follow the steps to Add Sales Tax
Be sure to clickSaveto finish setting up your vendor’s profile.
To enter an unpaid bill in FreshBooks, selectExpenseson the left menu bar and thenBills. This will take you to theBillsscreen, where you can selectNew Bill. You’ll then be taken to theAdd Vendorscreen.
To add a new bill, enter the following information:
- Click on theAdd Vendortext and type in a new vendor or choose from a list of vendors that you have used before.
- TheIssue Datedefaults to the current date automatically, but you can click to change it to another date instead.
- Change theDue Dateto when the bill is due for payment (the default is one month from the issue date).
- If needed, add a number in theBill Numberfield.
- Click on theAdd a Linebutton and then theDescriptionfield, where you can enter details about the bill.
- Click onAdd Categoryand choose a category or subcategory.
- Specify theRateand click onAdd Taxesif you want to add taxes to the invoice.
- TheQtywill default to 1; if needed, you can click and change the quantity.
- Repeat these steps as necessary to add more items or services to your bill.
- When you’re done, click on theSavebutton to finish.
Below is an example of what a completed bill will look like once all of the necessary information has been entered. Keep in mind that you can also upload an image of the original bill or any supporting documentation by clicking on the box below the greenSavebutton.
You can also change the currency and language of the invoice, which can be useful if you have international vendors. Adjust the settings to the right of the invoice by clicking onCurrency & Languageand change it if necessary. Make sure to clickDoneto save the information.
You can quickly view a summary of vendors and any unpaid bills for each by navigating to theBillsscreen. Below theRecently Updatedsection, you’ll see theAll Billssection. This list of bills displays the vendor name, category, issue date, description, amount, and status of the bill.
View an Accounts Payable Aging Report
The Accounts Payable (A/P) Aging report shows which vendors have outstanding bills that need to be paid. You can access the A/P Aging report by clicking onReportson the left menu bar and thenAccounts Payable AgingunderPayments Reports.
On your A/P Aging report, bills are grouped by Outstanding or Overdue into intervals of 0-30 days, 31-60 days, 61-90 days, and 90+ days. You can click on either theVendororTotalheaders at the top of the report to sort the data in ascending or descending order by that particular header.
SelectingMore Actionsat the top right will give you the option to export the report to Excel or to print your report.
To adjust your view of the A/P Aging report, click onFiltersunderSettings. From there, you can select:
- Reset All:Click on this link to restore the filters to the default settings
- As Of:Select between Today, End of Last Month, End of Last Quarter, End of Last Year, or Custom to enter a specific date range
- Group By:Choose between Outstanding (past the bill issue date) or Overdue (past the due date) bills
- Currency:Toggle between multiple currencies
To pay bills that have already been entered into FreshBooks, go to theExpensessection on the left menu bar and then click on theBillssub-section. Click on the bill that you want to mark as paid. Click onMore Actionsand then selectAdd a Paymentin the upper right corner of the screen, as shown below.
Then, you’ll see theAdd a Paymentpop-up. TheAmountwill be populated with the full total of the bill, but you can adjust this if the amount paid is different.
- Select thePayment Methodin the drop-down menu.
- TheDateof the payment will default to the current date, but you can click to change it to a different date if needed.
- Add details about the payment in thePayment Notesfield if desired.
- ClickAdd Paymentwhen you’re finished and the bill will then be marked as paid.
You can also perform other actions quickly from theBillssection by hovering over any bill to quickly access the following:
- Edit:Click on thepencil iconand you’ll be taken to the edit screen of the bill that allows you to adjust and save it
- Delete:Click on thetrash can iconto delete the bill. You can view all archived bills by clicking on theView Archived Billslink at the bottom of the list
- Add a Payment:Click on thecoin iconto add a payment to the bill
- More Actions:Click on theellipsis iconfor additional actions, including:
- Duplicate:Click on thetwo papers iconto create a copy of your bill
- Change Category:Click on thepizza iconto update the category of the bill
- Change Vendor:Click on theperson iconto update the vendor on the bill
- Archive:Click on thebox iconto move the bill to your Archived Bills list
Bottom Line
You have now learned how to track and pay bills inFreshBooks. The next tutorial in our FreshBooks course is “How to Reconcile Accounts and Classify Transactions.” That tutorial will cover how to classify imported bank transactions, how to match imported transactions with existing FreshBooks transactions, how to reconcile bank accounts, and how to print a reconciliation report.