Bill
Definition
A bill is a document from a vendor showing that the business owes money for goods or services received. Entering a bill records the expense or asset and creates an Accounts Payable liability.
Example
Northstar Creative receives a $450 bill for design software. The bookkeeper enters it as a bill, which records $450 of software expense and $450 of Accounts Payable.
Why It Matters
Bills create a record of what is owed and when it is due. Entering a bill correctly prevents recording the expense twice — once at entry and again at payment.