How to handle supplier bills, credits, VAT and statements in QuickBooks Online, and the accounting concepts behind each task.
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Choose the transaction that matches how you recorded the original purchase: a vendor credit for bills (called a supplier credit in UK versions), a bank deposit for expenses and cheques, or a credit card credit for card refunds. For a refund on a bill you have already paid, the vendor credit and the bank deposit are linked in Pay bills.
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Use Category details when the line needs an account from your chart of accounts. Use Item details when it needs a product or service from QuickBooks, with fields such as quantity and rate. The choice follows your reporting and inventory setup. Capturing several invoice lines does not, by itself, decide which section they should use.
Read articleA credit note is a document a supplier sends to reduce the amount you owe them, or to confirm they owe you money back. It refers to an earlier invoice and is issued for returned goods, overcharges, price corrections or cancelled orders.
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A purchase ledger is the record of what your business owes each supplier for goods and services bought on credit. It holds one account per supplier, and the balances across all of those accounts add up to your accounts payable figure.
Read articleAccounts payable (AP) is the money your business owes suppliers for goods and services it has received but not yet paid for, and the process of recording and paying those bills. The accounts payable process runs from receiving a supplier invoice through checking, coding, approving, paying and reconciling it.
Read articleThree-way matching checks a supplier invoice against the purchase order and the goods received note before you pay it. Two-way matching drops the receipt and compares only the invoice and the purchase order.
Read articleA CIS invoice is a normal subcontractor invoice that separates labour from materials, so the contractor can work out the deduction from the labour alone. If the job is within the VAT domestic reverse charge, it must also say so and must not add VAT to the amount payable.
Read articleCompare the supplier's statement with your purchase ledger balance for that supplier, then explain every difference. Tick each line on both sides, list what does not match, correct your own records and query the supplier about the rest.
Read articleA nominal code is the number of one account in your general ledger, such as sales, rent or printing. Your full list of them is the chart of accounts, and every line on a supplier bill is coded to one.
Read articleA reverse charge invoice shows no VAT charged by the supplier, because you, the UK buyer, account for the VAT on your own VAT return instead. You record it by using a reverse charge tax rate or code, so the software adds the VAT to box 1 and reclaims it in box 4.
Read articleAn invoice and a bill are the same document. The seller calls it an invoice because they issue it to get paid, and the buyer calls it a bill because they receive it and have to pay it.
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Use individual lines when charges need different ledger accounts, tax treatment or tracking, or when you need each product or service recorded separately. A single total suits one accounting treatment. A tax summary can preserve several tax rates without recreating every product line.
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