4 Methods for Tracking and Recording Purchases in QuickBooks

By Amanda Karen | CrunchSum

There are multiple ways you can enter, track, and record payments for purchases made by your business in QuickBooks. The four methods that will be discussed in detail include using Write Checks, Enter Credit Card Charges, Petty Cash Register, or Enter Bills. The form of payment you use when making purchases dictates how the transaction should be input into QuickBooks.

    Write Checks & Check Register

    Let’s say, for example, you purchased pens and printer paper using your company debit card. Because this represents an expense that you paid now and not something that you expect to pay in the future, this should be recorded through Write Checks or your Check Register.

      tracking and recording expenses in quickbooks

        Enter Credit Card Charges

        If you used your company credit card to purchase the pens and printer paper, this expense should be input through Enter Credit Card Charges.

          tracking and recording expenses in quickbooks

            You also have the option of bypassing Enter Credit Card Charges and entering the expense in the appropriate account register for the credit card.

              Enter Cash Payments

              If you purchased pens and printer paper with cash, you can input this expense in your Petty Cash Register.

                Enter Bills

                Record purchases that you expect to pay at a future date through Enter Bills. Any expense that you input through Enter Bills will be tracked in your accounts payable account.

                  tracking and recording expenses in quickbooks

                    How to Pay Bills

                    This is very important. Any bills that have been input through the Enter Bills window must be paid through Pay Bills (following the QuickBooks diagram below can be helpful). This ensures that the bill payment is applied to the correct bill and that your accounts payable balance is reduced accordingly.

                      tracking and recording expenses in quickbooks

                        It is important to understand why and when you would use each method. Are you using the correct method to record and track your business expenses?

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                          CrunchSum provides web-based bookkeeping and QuickBooks support services to web and technology companies.

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                          5 thoughts on “4 Methods for Tracking and Recording Purchases in QuickBooks

                          1. I will be starting to use Quckbooks soon to do our bookkeeping for a small business. I am sure this is a fairly simple process for someone versed in accounting, but I can assure you that for a newbie, this is really a daunting task. Most of our expenses are paid through automatic withdrawal from our bank account, or using our bank account debit card. How would I record these payments? Thanks for your help.

                            • Hi Philippe,

                              What version of QuickBooks do you use (i.e. desktop or QuickBooks Online)? For either you can sync your bank account(s) to QuickBooks, which will pull all of your bank transactions into your QuickBooks file/account. If using QuickBooks Online, when you sync your bank account(s), your bank transactions will download into QuickBooks Online automatically every night. With desktop, I think you may have to manually refresh your bank accounts in order for your transactions to download. Once your bank accounts have been synced, all you have to do is assign which accounts you would like your transactions recorded to. Also, make sure that you are reconciling your accounts on a monthly basis to confirm that all of your bank transactions have been included in QuickBooks for the given month.

                              If you have any additional questions please contact us via our contact page. Thanks for the comment and best of luck!

                            • Philippe,

                              The other comment here is one way of doing it. However, to simplify matters you can set up QuickBooks to “memorize” your auto drafts for the payment to be automatically input into you register. You can do this by going to Write Check and then once the information is filled in – with all proper account links – you can go into Edit –> Memorize Check –> Automate Transaction Entry. From that point you put in the information relevant to when you want the transaction to be put into your register. On the day the memorized transaction is to be put in the register QuickBooks will alert you. I hope this simplifies things for you.

                          2. How do I record expenses from a statement? Let’s say I have an account with Home Depot and they’ll send me a statement by the end of the month. Should I use check or bills. My accountant asked me to always use checks?

                            • Hi Ana, thank you for the comment. The most efficient way to record expenses is to sync your business bank account(s) (including business credit card accounts) to QuickBooks. If you use QuickBooks Online, your bank transactions will automatically download into your QuickBooks Online account daily. If you use a QuickBooks desktop product, I think that you might have to manually update your bank accounts in order to get your downloaded transactions to update in your QuickBooks file (you will need to confirm this step). Once your bank transactions are downloaded you can then assign them to the appropriate general ledger account (expense, income, asset, liability, etc.). For example, and using your example, you would see a bank transaction downloaded from your bank account titled “Home Depot” into QuickBooks that you can then assign to an appropriate expense account.

                                It is typical general practice to use the bill feature of QuickBooks when you have received a physical bill that you wish to record in QuickBooks that will be paid on a future date. For any expenses already paid, bills do not need to be entered for them. However, using bills to record expenses is really a matter of personal preference.

                                  None of the above constitutes legal advice and is provided for informational purposes only. For further questions, please confirm with your CPA.

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