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Record Expenses in QuickBooks

There is two ways to record expenses in QuickBooks...

You can record and pay your expenses at the same time by using the Write Check method or you can record your bills as they come in and pay them later by using the “Enter Bills method.



Tips on How to Record Expenses in QuickBooks:

If you are a small business with little overhead and don’t usually buy things on credit, the “Write Check method will probably work best for you. On this page we will discuss how to use this method.

First of all, you should be aware that when you record expenses in QuickBooks with this method, you are doing cash-basis accounting. See this page for more details on the difference on cash basis and accrual accounting.

With cash basis accounting, you are recording the expenses when you pay for it, not when you receive the bill. This is the way I have my QuickBooks set up and it makes recording expenses in QuickBooks a lot easier, but it does make keeping track of unpaid bills a little more difficult. I can deal with that and if you can too … let’s proceed with the steps for using this method.

How to Record Expenses in QuickBooks

Different Methods of Recording Expenses in QuickBooks:

Okay … even in this simplified method there are a couple of ways you can record your expenses in QuickBooks. The easiest way is to open the register on the bank account you want to record the expense in.

Choose Banking → Use Register. Choose correct bank account. Fill it out just as you would in a regular check register, and assign the account you want to expense to fall under such as office supplies.

However, if you need to record what job or class the expense falls under, or you paying for an inventory item, you will need to use the Write Check window.

Here are the steps for using the Write Check window to record expenses in QuickBooks:

  1. You can either click the “Write Check” icon on your Home pane or choose Banking → Write Checks.
  2. Click the drop-down arrow on the Bank Account text box and choose which bank account you want your expense to come out of. This is a very important step! I can’t tell you how many times I have forgot to make certain I had the right "bank" account chosen and ended up with an incorrect bank balance and had to go searching to see where I messed up.
  3. Tab over to No. You can record the number of the check you actually wrote or will be writing. You can also type cash, debit, etc.
  4. Tab over to date. Don’t forget the shortcut keys I showed you in recording sales in QuickBooks, or you can click the button to the right of the date box to get a date from the pop-up calendar.
  5. Tab again to Pay to the Order of line. Start typing name and if you’ve written a check to this entity before the AutoFill feature fills in the name. This AutoFill feature can also fill out the whole check based on the last check you wrote to this vendor. If it doesn’t you can turn it on by going to Edit → Preferences then click on the General icon, and make sure your choice is checked in the Automatically Recall Information section.If you have not paid anything to this entity before, QuickBooks will pop up the Name Not Found window. You can either click Quick Add or Set Up to add this person or place to one of your lists.
  6. Tab over to amount unless AutoFill has already filled in all of the correct information (if so go to step #8). Enter the amount and hit tab.
  7. Fill in the Address text box if you need to actually send this check by mail … if not skip it.
  8. Tab again to the memo line. You can put an account number here, especially if you are actually filling out the check to print -- or you can just leave this field blank.
  9. Now click on the drop-down list in the first line in the Account column in the bottom section of the Write Check window. Choose the expense account you are assigning this expense to. If the expense account you need is not already set up in your chart of accounts, click the Add New, fill in the information, and click OK.If you need to assign the expense to two or more accounts, simply click in the second line and add an additional account and more if needed.
  10. Tab over to the Amount column and change if you need to. An example of why you would change amount is if you were assigning total amount to several different accounts.
  11. Tab over to Memo column. Here is where you can add a note to yourself to remind yourself what this expense was for such as business cards, printer, etc. (or you can just leave this field blank).
  12. Tab again to assign the expense to a Customer:Job such as a landscaper assigning the purchase of some shrubs to the job he is currently doing. Can leave this field blank.
  13. Now you will either save and close or save and new to record more expenses in QuickBooks -- unless you set up class tracking. See this page on setting up class tracking. If you track expenses by class you will have an additional column to tab over to. As I have stated before, I have multiple websites that I track in QuickBooks. I have class tracking turned on and will assign each expense to either a particular website or to the class I named Administration when I record expenses in QuickBooks.
  14. Click the Save and New or Save and Close button unless you purchased an inventory item; in which case, you have more work to do. Go to next step.
  15. Choose the Item tab. Click the drop-down list in the item column. Choose the item you are paying for or -- if it is not in the list -- click Add New at the top of the list and fill out the New Item window. (See how to add items to QuickBooks) P.S. You can add all the items included in this one purchase on this tab. Click appropriate button to finish entering check (see step 14).

Previous tutorials on How to Use QuickBooks:

  1. QuickBooks Tutorial 1: Getting Started
  2. QuickBooks Tutorial 2: Preparing a Trial Balance
  3. QuickBooks Tutorial 3: Installing QuickBooks and Creating a Co File
  4. QuickBooks Tutorial 4:Setting up a Chart of Accounts
  5. QuickBooks Tutorial 5: Class Tracking
  6. QuickBooks Tutorial 6: Setting up an Item List
  7. QuickBooks Tutorial 7: Setting up a Customer List
  8. QuickBooks Tutorial 8: Recording Sales
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QuickBooks class tracking enables you to classify transactions by locations or departments.


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How to record sales in QuickBooks using the Sale Receipt form?



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