Purchase bills, expenses, and vendor payments: keep payables organised

Sales records explain money coming into a business. Purchase records explain where money is committed and where it has already gone. Keeping vendor bills, expenses, and payments connected improves cash planning and reduces duplicate or missed entries. ## Know when to use a bill and when to use an expense A **bill** records a vendor invoice that may be due now or later. It carries a vendor bill number, bill date, due date, line items, taxes, and a payable status. An **expense** records business spending through an expense account and a paid-through account. It can include a vendor, invoice reference, GST treatment, and notes. The correct choice depends on the source document and whether the amount remains payable. Use a bill when you need to track an obligation and later allocate a supplier payment. Use an expense for spending recorded directly through the selected account workflow. ## Create useful vendor records Add the vendor name, GSTIN when applicable, address, email, phone number, and payment information. A consistent vendor record helps group bills, purchase orders, payments, and credits under the same supplier. Avoid duplicate vendor profiles created with small name variations. Search before adding a new supplier. ## Record vendor bills carefully Open **Purchase > Bills** and select **New Bill**. Choose the vendor and enter the vendor's original Bill #. Add an optional internal reference when useful, then review the bill date, due date, and status. For each line item, confirm the purchase description, quantity, rate, tax, and tax mode. Add notes and review the summary before saving. Using the original vendor invoice number helps reduce duplicate entries and simplifies reconciliation. See the step-by-step [Bills guide](/help/purchases/bills). ## Use bill status to understand payables Common bill statuses communicate the current obligation: - **Open:** an active payable remains. - **Partially paid:** some value has been allocated, but a balance remains. - **Paid:** the full bill has been settled. - **Void:** the bill should no longer affect the normal payable workflow. Do not mark a bill paid only to clear it from a list. Record the supplier payment and allocate it so the history explains when, how, and against which bill the money was paid. ## Record day-to-day expenses with context When recording an expense, choose the date, expense account, amount, and paid-through account. Add the vendor when applicable, along with invoice number, GST or tax treatment, and a note that will still make sense several months later. Clear expense accounts improve the expense breakdown and profit and loss report. Accurate vendor GST information also improves source data for Clause 44 working reports. The [Expenses guide](/help/purchases/expenses) describes the available fields and report effects. ## Allocate vendor payments Open **Purchase > Payments Made** when settling one or more supplier bills. Choose the vendor, enter the amount and payment date, select the mode, and add a bank or transaction reference. You can allocate the payment manually or use auto allocation after choosing a vendor and entering a positive amount. Always review the proposed distribution before saving, particularly when one payment covers parts of several bills. Read the [Payments made guide](/help/purchases/payments-made) for allocation details. ## Adopt a weekly payables review Use a short weekly process: 1. Enter all newly received vendor bills. 2. Check bills approaching their due date. 3. Review available cash before scheduling payments. 4. Record payments immediately after they are made. 5. Confirm partial allocations and remaining balances. 6. Investigate duplicate bill numbers or unexpected amounts. This creates a better picture of near-term cash requirements than waiting until suppliers send reminders. ## Improve report quality at the source Reports cannot repair incomplete source records automatically. Use the right vendor, expense account, tax treatment, bill number, payment reference, and date while entering each transaction. Connected purchasing records help answer practical questions: what is due, which supplier was paid, how the payment was allocated, where spending is increasing, and which transactions need accountant review.