Friday, March 21, 2008

Microsoft Office Accounting Part 11- Recording Vendor Bills

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants and business owners. Today's topic in our series of tips for MS Office accounting users is RECORDING VENDOR PAYMENTS.

The vendor bill is simply an invoice from the vendor to your company. It can contain products (inventory or non-inventory items), but it can also be a bill for services, such as utilities.
The Vendor Bill is similar to the invoice; however it only contains one address – the address where you want to send the payment for the bill.
You should note the following about a vendor bill:

- A vendor bill can be created either from a blank template or from a purchase order or item receipt.

-Bills can contains item or expense lines (as well as comments lines).

-If a vendor bill is created from an item receipt (in Office Accounting Professional), the item receipt will be voided and replaced by the bill.

-The vendor bill is a financial posting document and will post to accounts payable (and inventory if applicable).

-The vendor bill cannot be printed and sent – it is received from the vendor.

-Similar to the invoice the payment terms on the vendor bill defines the due date and the cash discount of the bill.

-Bills are paid suing the Pay Bills worksheet.

Vendor Bill Postings

The vendor bill updates the accounts payable and inventory (when applicable) the moment it is saved.

The vendor bill will:

-Debit the expense account with the amounts on the lines.

-Credit the accounts payable account with the total on the vendor bill.

If the vendor bill contains inventory items (Office Accounting Professional only) the vendor bill will:

-Debit the inventory asset account with the quantity and cost of the items.

-Credit the accounts payable account with the total on the vendor bill.

-Void the item receipt (including the postings to pending item receipts) if the bill was created from an item receipt.

The vendor bill thus creates postings with the actual amounts billed, as these could differ from the amounts on the item receipt. This will trigger a recalculation of cost of goods sold if the item has been resold on an invoice.

I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks, check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next Time: Setting Up Accounts

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sales programs.