When tracking inventory in QuickBooks, there are a few different ways to receive in the goods and create a payable to your vendor. When you go into the Vendors dropdown, you will see 3 options. “Receive Items and Enter Bill”, “Receive Items” and “Enter Bill for Received Items.” Now, I don’t know about you, but when I first saw all three of these options, I was very confused as to which one I should use and what the difference was between them. Mostly it depends on the timing of when your items come in and when the actual bill shows up. Here, I will explain it to hopefully clear up any confusion.
The first option is “Receive Items and Enter Bill.” This option is for when your inventory items show up at your location at the same time as the bill. Some companies put the actual Bill for the goods right in with the box of the actual goods. If that is the case with you, in QuickBooks you can choose this “receive items and enter bill” option. By doing this, you choose the items from the item list that came in as well as the quantity that showed up. Once you Save & Close, QB will not only increase your inventory quantities and therefor your Inventory Asset account, it will also automatically create a bill or a payable to be paid in “Vendors” > “Pay Bills.”
The second option is “Receive Items.” This option is for when your inventory items show up and then the actual bill comes in the mail a few days or weeks after receiving the actual goods. If this is the case with you, in QuickBooks you can choose the “receive items” option. This screen will enable you to enter in the items from the item list and the quantities of the items received. Once you save this Item Receipt, QB will increase your inventory quantities as well as your inventory asset account. It will not create a bill to be paid. It just kind of sits there in limbo until you convert it to an actual bill at a later date.
Now, last but not least is the “Enter Bill for Received Items” option. This option is for people that used Option 2 when the inventory items came into the store. Once the bill comes in the mail, you choose this option and a screen will appear where you can choose your vendor name and then it will give you a list of all the Item Receipts that have not yet been converted into a bill. You choose the receipt that you want to make the bill for and choose OK. At this point, QB will take that item receipt and convert it into the bill where you can make any last minute edits if need be. Once you save and close, you will see the bill sitting in “Vendors” > “Pay Bills”
I hope this clears up any confusion and as always, feel free to contact us with any questions!